The Federal Court this week approved the WA government's settlement payment of $180 million to thousands of eligible Aboriginal workers whose wages were stolen under racist government policies throughout much of the 20th century.

Justice Bernard Murphy ruled about 8,750 successful claimants would receive a share in the payment, after lawyers and a third-party litigator that partly funded the action were paid.

The class action was initiated by Gooniyandi stockman and artist Mervyn Street, who worked on stations for most of his life and was not paid a wage until he was in his 30s.

The class action led by Shine Lawyers centred on WA laws in effect from 1936 and 1972 that allowed the state government to withhold up to three quarters of an Aboriginal person's wage.

The WA government announced in November it would pay up to $180.4 million to eligible Aboriginal workers, their spouses and children, including $15.4 million in legal costs.

Justice Murphy heard submissions from Shine Lawyers and other eligible claimants, the state government and Litigation Lending Services (LLS), the litigation funder backing the case, in Perth on Tuesday.

Justice Murphy said while he was not ready to determine an exact amount each claimant would receive, he was "deeply sorry" for the treatment they'd endured.

"It should also be understood the proposed settlement related to unpaid or underpaid wages and related claims. It does not relate to the disgraceful way First Nations people were treated," he said, the ABC reports.

Justice Murphy said it was vital the settlement fund was approved, as any settlement reached during litigation could have taken "years" to reach and a "substantial amount of time".

"I propose to approve the settlement not because it's handsome, not because it's generous but because it's the best that could be done in all of the circumstances," he said.

"The stories the court heard will stay with me forever and I'm deeply sorry that First Nations people were poorly treated."

In late November last year a bipartisan apology to Aboriginal and Torres Strait Islander workers for decades of stolen wages in Western Australia has been heard by members of parliament and applicants in the class action.

In April, Shine Lawyers travelled to more than 200 communities across WA to register complainants before the registration deadline of June 30, 2024, which was later extended to the end of September.

The firm's legal costs totalled to just under $30 million.

Justice Murphy said he had no criticism of the quality of work provided by the legal team, but noted it was a significant amount, the ABC reports.

"How could it possibly cost $10 million to register 15,000 people? That's a question I am seeking to answer," he said.

Justice Murphy added: "This was a big case, a big and difficult case in which the lawyers worked hard to get a good result. They need to be paid."

He also praised the lawyers who brought forward the case and the quality of the submissions raised.