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American Locker Group said Friday it will pay $1.23 million to settle a lawsuit stemming from environmental contamination at a facility the Jamestown-based company once owned in Gowanda.

The settlement ends a lawsuit filed six years ago in state Supreme Court by current or former property owners in Gowanda over contamination from a machine shop that American Locker Group and others operated on the site.

That suit, which was scheduled to go to trial on April 19, had sought damages totaling $58 million.

Under the settlement, American Locker Group will pay the property's current owner, Gowanda Electronics Corp., and the owners of property adjacent to the site $825,000 this month, followed by $200,000 payments in June and August.

American Locker Group, which earlier this year lost a key U.S. Postal Service contract that provided more than half of its sales, sold the property to Gowanda Electronics before 1980.

The settlement, however, does not relieve American Locker Group of its potential liability for cleaning up contamination that began at the property that it once owned and then migrated to other land, the company said.

American Locker Group said its insurance carrier has agreed to reimburse the company for $122,500 toward the settlement.

The state Department of Environmental Conservation has said American Locker Group is "a potentially responsible party" for the contamination. But the company has not admitted to any liability for the contamination and has not agreed to a cleanup plan proposed by the DEC.