The fate of a lawsuit that challenged the state's title to lands once held by the Hawaiian monarchy now rests with Gov. Linda Lingle, who took the case all the way to the U.S. Supreme Court.

A settlement agreement, announced yesterday by the Office of Hawaiian Affairs, is contingent upon Lingle's approval of Senate Bill 1677, which requires a two-thirds vote of approval in the House and Senate before most ceded lands held by the state can be sold.

Lawmakers passed the measure yesterday and sent it to the governor for consideration.

Lingle said this week she had not seen the bill, but that her office would do its usual vetting once the bill reaches her desk.

“;I think it's absolutely in the Legislature's authority to make a decision on how we're going to decide which state lands, if any, get sold to private interests or traded to private interests,”; Lingle said Monday at a news conference. “;With the concept, I think we're in alignment. It's just reading the specifics of the bill.”;

The proposal also requires OHA to be informed of any proposed sale at the time the Legislature is notified. Any transfer of land would be governed by existing law.

If the bill is signed into law, OHA's board of trustees and three of the four private plaintiffs will drop their claims, with the understanding they may file similar claims later on if they feel terms of the agreement are not being met, OHA said in a news release.

The fourth plaintiff, University of Hawaii professor Jonathan Osorio is free to continue pursuing his claims, but OHA and the other plaintiffs will not participate, OHA said.

Plaintiffs sued in 1994, seeking to stop the sale of 1.2 million acres of ceded lands to developers for affordable-housing projects.

The Hawaii Supreme Court sided with plaintiffs, blocking the sale and prompting the Lingle administration's appeal to the U.S. Supreme Court.

On March 31 the high court unanimously overturned that ruling and sent it back to the Hawaii court, but attorneys said they hoped to work out a settlement.

Lingle has said the state has no plans to sell any ceded lands, but that it should have title to the land if it chooses to sell.

“;There is no question that OHA and the state had significant differences with regard to this lawsuit,”; OHA Chairwoman Haunani Apoliona and state Attorney General Mark Bennett said in a jointly released written statement. “;This settlement resolves those differences in a way we believe is beneficial to all citizens of Hawaii.”;