Medical and counseling expenses would be provided to the families of the 32 killed and dozens of surviving victims, said the person, who asked Monday to remain anonymous because those involved were told not to discuss the settlement.
Families would also have the opportunity to question the governor and university officials about the shootings, according to the family member.
Families were asked to say by March 31 whether they were comfortable with the proposal. If they agree, they cannot sue the state government, including Virginia Tech.
Seung-Hui Cho, a mentally disturbed student, killed the 32 victims and wounded several others at Virginia Tech on April 16 before committing suicide.
The proposal would require all families to agree and says the state can withdraw the proposal if not enough parties do, the family member said. Other relatives of victims declined to talk to The Associated Press.
In addition to the $100,000 payments to each of the families of those killed, another $800,000 would be reserved for the injured, with a maximum of $100,000 to any person.
The proposal also would set up a fund to reimburse or advance expenses not covered by insurance for medical, psychological and psychiatric care for victims and their immediate families.
Gov. Timothy M. Kaine would meet with victims and relatives three more times over the next two years to review legislative and administrative responses to the shootings.
Victims and families also could meet with senior Virginia Tech officials within six months of the settlement to ask questions and discuss changes made to the campus since the tragedy, as well as memorial activities. They also would receive an update on the investigation from the university and state police.
In October, the families and surviving victims received payments ranging from $11,500 to $208,000 from the Hokie Spirit Memorial Fund, set up in the days after the April 16 shootings to handle donations that poured into the Blacksburg school.
The proposed settlement would keep the fund, which had been scheduled to close this past December, open to accept contributions for at least five more years.