U.S. Deputy Treasury Secretary Stuart Eizenstat, representatives of Poland, Russia, Ukraine, Belarus, the Czech Republic and the head of the Jewish Claims Conference signed documents along with German officials establishing the compensation fund.
Eizenstat said the agreement is "genuinely historic," marking probably the last major negotiations with Germany aimed at redressing Nazi wrongs. German Foreign Minister Joschka Fischer called the fund's creation "above all a gesture of moral responsibility" toward hundreds of thousands of Nazi victims.
"It can't undo the suffering that the victims went through, and unfortunately it also comes too late for many," he said in opening remarks. But he said it was still a "historic day" not only for the survivors, but Germans as well.
"Germany learned many things about itself and its past during the negotiating process, and openly discussed what had been suppressed all too willingly and successfully for a long time," he said.
More than 1 million former laborers are expected to be eligible for payments from the fund, mostly central and eastern Europeans. The fund also will compensate people subjected to medical experiments by the Nazis and some with other Holocaust-related claims.
"Finally we have a victory, not only morally but also in a material sense," said Karel Horak, a 79-year-old Czech survivor of a Nazi-era forced labor camp who attended Monday's ceremony.
German Chancellor Gerhard Schroeder said the foundation trustees would meet to draw up application procedures "immediately," and said the government would transfer its entire contribution -- $2.5 billion -- to the fund's coffers this year so that payments can begin quickly.
He renewed his "urgent appeal" to German firms "still on the sidelines" to contribute to their half of the fund. So far 3,127 German businesses have pledged about $1.6 billion.
Even firms founded after World War II should step forward because of the "moral and historic dimension of this task for Germany and German trade and industry," Schroeder said at a news conference. "It lies in all our interests."
Among the latest institutions to pledge support was Germany's Evangelical Church, which promised $5 million last week as it acknowledged that Protestant churches used forced laborers during the Nazi era for such jobs as grave-digging.
Lambsdorff said he would "be happy" if Germany's Roman Catholic church would do the same. But a church spokesman said they had no immediate plans for a general contribution to the fund.
Rudolf Hammberschmidt, spokesman for the German Bishop Conference, said they were aware of only two Catholic church communities in Berlin who employed forced laborers in cemeteries, and appropriate action would be taken at that level.
Among the documents signed Monday were guarantees from Washington intended to protect German companies from class-action lawsuits in the United States. Such legal actions catapulted the slave labor issue to the forefront and induced Schroeder and leading industrialists to begin talks on a comprehensive fund more than a year ago.