Councillors have unanimously voted to opt in to a class action against the Department of Defence after receiving confidential legal advise.
Katherine is suing Defence for compensation over PFAS contamination and a subsequent fall in property values, along with Oakey in Queensland and Williamtown in NSW.
The vote was put to the councillors this week at a Special Meeting of Council.
Alderman Toni Tapp Coutts endorsed the legal recommendations despite prior concerns.
"I didn't initially [agree] with the recommendation," she said.
"I thought we should not participate because it could tie us up, but now we have had proper legal advice I agree."
Shine Lawyers signed up hundreds of Katherine people to the class action last year.
They will be taking on Defence who has put aside more than $50 million to prepare for the case.
Rather than actively join the legal action however, residents have to actively remove themselves if they don't want to take part in the action, anticipated to hit court later this year.
Up until the council reported it had received legal advice, it maintained it would be steering clear of any legal action.
"If Katherine Town Council does not remain in the class action, KTC will have no legal entitlement to require Defence to fix any issues that may arise and will be relying on its relationship with Defence to ensure issues are remedied," a KTC report states.
At the Special Meeting of Council on Tuesday night the Mayor, Fay Miller, said "it is important to acknowledge the good work Defence has done."
Katherine property owners have until tomorrow, July 19 to opt out. of the class action.
These are Katherine residents who own, or have owned a property in the investigation area (basically Katherine township) as at November 23, 2016.
If they want no part in the class action, they must fill out an opt out form, also available though the Shine Lawyers website.
The agenda from the Special Meeting of Council can be read here.
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