In a first-of-its-kind settlement, the U.S. Department of Justice says a state has committed to overhaul its system of sheltered workshops and day programs for people with developmental disabilities.

The agreement announced Tuesday with the state of Rhode Island comes after a Justice Department investigation found systematic violations of the Americans with Disabilities Act in the state’s approach to transition and employment for individuals with developmental disabilities.

Students in the state were often funneled from school to sheltered workshops, the Justice Department found. Once there, they typically lingered for years in segregated environments earning an average of $2.21 per hour.

Under the settlement, Rhode Island is pledging to offer supported employment placements that pay at least minimum wage in addition to community-based educational, leisure or volunteer activities for individuals with disabilities when they are not working. What’s more, the state will offer transition services for students age 14 and older that include internships, visits to job sites and mentoring.

The state plans to redirect “significant” funds over a 10-year period that were used for segregated settings in order to provide the integrated offerings.

Federal officials said the deal with Rhode Island is the first-ever statewide settlement to address the rights of people with disabilities to receive community-based, state-funded employment and daytime services.

With an estimated 450,000 people with developmental disabilities nationwide currently spending their days in sheltered workshops and other segregated programs, officials said the agreement sets the bar for every other state in the country.

“Today’s agreement will make Rhode Island a national leader in the movement to bring people with disabilities out of segregated work settings and into typical jobs in the community at competitive pay,” said Jocelyn Samuels, acting assistant attorney general for the Civil Rights Division at the Justice Department. “We believe that Rhode Island will be a model for the nation with respect to integrated employment for people with disabilities.”

Despite the push toward community-based offerings, Samuels said individuals with developmental disabilities will be able to remain in segregated environments if they choose.

“To ensure informed choice, individuals with I/DD may also remain in sheltered programs if they request a variance after they have received a vocational assessment, a trial work experience, outreach information and benefits counseling,” Samuels said.

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