WASHINGTON (AP) — Plaintiffs challenging the Trump administration’s cost-cutting measures against an agency that funds and promotes libraries across the U.S. said Thursday they settled the case with the Justice Department in a deal that would reverse some of the steps taken.

The American Library Association and the American Federation of State, County and Municipal Employees said that they had reached an agreement with the Justice Department that will allow the Institute of Museum and Library Sciences to continue awarding grants and operating programs that support libraries and museums.

The White House referred questions to the Justice Department. The Civil Division of the Justice Department, which agreed to the settlement, did not immediately comment.

The two organizations filed a lawsuit last May, spearheaded by the group Democracy Forward, to stop the administration from gutting the IMLS after President Donald Trump signed a March 14 executive order that referred to it and several other federal agencies as “unnecessary.”

The measures that set in motion were part of a broader attempt by the administration to save money by slashing staff, grants and programs in the federal government.

Staff was subsequently placed on administrative leave with many receiving termination notices. The agency’s then acting director also began canceling grants and contracts and fired the members of the National Museum and Library Services Board.

“When the administration began shuttering IMLS last year, it set off a chain reaction. Libraries across the country started cutting hours, staff and services people rely on – after-school programs, support for job seekers and connection for older adults,” said American Library Association president Sam Helmick in a press statement.

The settlement said all reductions in force to the staff in 2025 have been rescinded and all employees who received them are authorized to return to work. IMLS will not issue any more RIFs in order “to effectuate” the purpose of the executive order, the settlement said.

Lee Saunders, president of the American Federation of State, County and Municipal Employees, called the settlement a victory for every community that depends on libraries and museums.

The plaintiffs will file a joint stipulation of dismissal of the case without prejudice in seven days if the government adheres to terms of the agreement.

The settlement announcement comes three days after a federal judge in Rhode Island approved an administration request to withdraw its appeal of a federal district court opinion in a separate lawsuit filed by 21 attorneys general.

IMLS is the only federal agency tasked with providing funding for the nation’s libraries. It was established in 1996 by a Republican-led Congress and has a mission to “advance, support, and empower America’s museums, libraries, and related organizations through grantmaking, research, and policy development.”

The institute combined the services of previous government agencies, including the National Commission on Libraries and Information Science and the Institute of Museum Services.

It distributes thousands of grants nationwide, totaling in recent years to more than $200 million annually.