After months of negotiations, the McAuliffe administration says it has reached a settlement with the private consortium that was to build a new road between Suffolk and Petersburg.

U.S. 460 Mobility Partners, which contracted with the state to build the road that the administration canceled last year over environmental concerns, will return $46 million to taxpayers and cancel another $103 million that it could have claimed under the terms of the contract, McAuliffe announced Thursday.

Under the settlement, which, it is understood, will avoid a court battle, Mobility Partners will keep about $210 million, while the state will still have to pay $50 million to cover interest on bonds that were sold to finance the project, according to a Virginian-Pilot report citing sources.

None of the 55-mile-long road championed by former Gov. Bob McDonnell was built before it was canceled. Among chief arguments for the road, it was meant to spread inland the economic benefits of the Port of Virginia, improve motorist safety and allow Hampton Roads and northeast North Carolina to evacuate in the event of a hurricane or other disaster.

McAuliffe announced the latest development in the saga at a ceremonial signing into law of new legislation to reform public-private transportation projects, carried in the House of Delegates by Suffolk’s Chris Jones. The legislation was fired by the failed road and other contentious transportation deals.

“While this is a positive development, the fact remains that Virginians have already spent hundreds of millions of dollars on a project that will never be built because state officials negotiated a contract that left the commonwealth holding the bag when the environmental risks were too great to move forward,” McAuliffe stated.

“I regret that that contract did not allow for greater steps to mitigate the impact of this failed project, but I am proud of the bipartisan reforms we worked with leaders like Delegate Chris Jones to make to prevent disasters like this from occurring in the future.”

State transportation officials have proposed a downscaled project to improve 460 between Suffolk and west of Zuni — one that the U.S. Army Corps of Engineers has signaled would be environmentally feasible.

The new plan, supported in principle by the Commonwealth Transportation Board but competing against other highway projects for funding under a new scoring arrangement, involves a new four-lane, interstate-standard road between Suffolk and Windsor.

It also involves improving the existing road for the rest of the 17-mile project length, including a new bridge across the flood-prone Blackwater River.

The new plan is estimated to cost $375 million to $425 million, and Aubrey Layne, Virginia’s transportation secretary, has said that ample state and federal funding exists.

In other words, the new road, according to Layne, wouldn’t be tolled — tolls were yet another contentious aspect of the previous road, besides the impact on wetlands — and the Hampton Roads Transportation Fund — new, regional funding the General Assembly created in 2013 — wouldn’t be tapped.