In a statement to the House of Commons on the Mau Mau uprising, Foreign Secretary William Hague said:
Foreign Secretary William Hague has announced a £19.9 million compensation settlement for Kenyans tortured during the Mau Mau uprising in the 1950s.
Mr Hague said the settlement scheme includes payments for 5,228 claimants.
The Government will also support the construction of a memorial in Nairobi to the victims of torture and other abuses during the colonial era.
Foreign Secretary William Hague told MPs the Government "sincerely regrets" that Kenyans were tortured during the Mau Mau uprising in the 1950s.
"Torture and ill treatment are abhorrent violations of human dignity which we unreservedly condemn", Mr Hague said.
Members of the Mau Mau War Veterans Association have been gathering in Kenya's capital Nairobi to hear the British government announce a compensation deal relating to torture in the former colony.
The simultaneous statement by the Foreign Secretary William Hague and British High Commissioner is expected to include details of a multi-million pound settlement and a formal apology. It will be addressed to victims of colonial-era torture.
William Hague will make a statement in the Commons tomorrow which is expected to set out plans to compensate Kenyans tortured during the Mau Mau uprising.
Last year the High Court ruled that three Kenyans tortured during the unrest could pursue their compensation claims against the Government.
The Foreign Office had attempted to stop the case and claimed the actions were brought outside the legal time limit and claimed there were "irredeemable difficulties" in relation to the availability of witnesses and documents.
It did not, however, dispute they suffered "torture and other ill-treatment at the hands of the colonial administration".
Lawyers for Wambugu Wa Nyingi, Paulo Muoka Nzili and Jane Muthoni Mara argued that it was an exceptional case in which the judge should exercise his discretion in their favour and the case was heard and won. Negotiations over compensation have now reached an agreement.
Caroline Elkins, a Harvard history professor who acted as an expert witness in the court case launched in 2009, said the settlement would be the first of its kind for the former British Empire.
"(It) should be seen as a triumph," Elkins said during a visit to Nairobi for the British announcement.
Ms Elkins book 'Imperial Reckoning: The Untold Story of Britain's Gulag in Kenya' served as the basis for the Mau Mau court case in London.
A Kenyan lawyer who acted as an advisor to the Mau Mau veterans seeking compensation said the negotiations over a settlement have been completed.
Paul Muite said: "We have agreed on an out-of-court settlement."
"(The negotiations) have included everybody with sufficient evidence of torture. And that number is about 5,200," he said, although he declined to comment on the size of the payout.
The British Government has agreed a multi-million pound compensation settlement for thousands of Kenyans tortured during the Mau Mau uprising.
The abuse took place under British colonial rule in Kenya during the 1950s. The Kenya Human Rights Commission has estimated that 90,000 people were killed or maimed and 160,000 were detained during the uprising.
The Foreign Office is expected to make a formal announcement tomorrow but declined a Reuters request for comment on reports that the settlement would total £14 million.
This would work out at about £2,600 - or 339,560 Kenyan shillings - per claimant in a country where average national income per capita is around 70,000 shillings.
The government is negotiating payments to thousands of Kenyans detained and mistreated by British soldiers during the Mau Mau insurgency in Kenya in the 1950s, the Guardian reports.
The payments would be the first compensation settlement from crimes committed under imperial rule and could open the door to other claims from around the world.
The talks come after the government lost their attempts to prevent elderly survivors of prison camps from seeking redress through British courts.
Attempts by British colonial authorities to cover-up the brutal killings of 11 prisoners during the Mau Mau uprising in Kenya have been exposed in previously secret Government documents.
No-one has ever been prosecuted for the deaths even though evidence showed the detainees at Hola detention camp were clubbed to death by prison warders in March 1959 after they refused to work.
The Foreign Office files, released by the National Archives, showed British officials attempted to blame their deaths on "drinking too much water" rather than violence, and refused to identify individuals involved.
One of three elderly Kenyans, who last month won a High Court ruling to sue the British Government for damages over torture, claims he was beaten unconscious during the clubbings.
The Hola prison camp was one of many built by British colonial forces during the uprising to detain suspected rebels.