A Nova Scotia hospital and the parents of a severely disabled child have reached a $4.5-million settlement over a medical malpractice suit.

The parents of Jacob Saulnier, 12, of Upper Clements, say he developed cerebral palsy during a traumatic birth at the Valley Regional Hospital.

Lawyer Ray Wagner, who represented Jacob's parents, Ray and Beverly Saulnier, said he's never seen a $4.5-million payout for a case like this.

"It is a significant case, no question about that," Wagner told CBC News on Wednesday, when the published decision was released.

The legal battle began nine years ago when the Saulniers launched a lawsuit against a doctor, the hospital and the former Western Regional Health Board.

Eventually, both sides opted to avoid an expensive and lengthy jury trial and use a mediator instead. The settlement was approved by a justice of the Nova Scotia Supreme Court.

Wagner said both legal teams were committed to helping Jacob.

"There was a child here that was compromised at birth. It was a sad story from the day that the child was born. It's been a sad story all the way through," he said.

A little more than half of the $4.5 million is to be set aside for Jacob's care, with periodic payments going out for the rest of his life.

Each of Jacob's parents are to receive $125,000 and a specially equipped van to meet his needs. The rest of the money is to remain in a trust.

Tamara Gilley, spokesperson for the Annapolis Valley District Health Authority, said the hospital is pleased with the settlement.

"We are pleased for all parties involved that an agreed-upon solution has been found during this difficult situation and that it has been agreed upon by the courts," she said.