The Washington Transportation Department has reached a settlement with the Texas company that was late in setting up tolling on the Highway 520 floating bridge on Lake Washington.

The agreement announced Wednesday settles claims and counterclaims with the ETC Corp. and avoids possible litigation over the delay as well as problems in processing tolls on the Tacoma Narrows Bridge.

The department says the settlement is worth $6.4 million - $2.4 million in reduced monthly payments to ETC and $4 million for a software license that would allow the state to operate the tolling system without the company.

ETC says it pays no cash and gets a four-year contract extension worth $29 million.

Tolling began in late December on the floating bridge instead of the spring of 2011 as planned.