The government has awarded £20m of funding for people disabled after their mothers took the drug thalidomide.
An apology will also be made in Parliament in the New Year.
Campaigners have long battled for additional support for the 466 UK survivors disabled by drug, prescribed from 1958-61 for morning sickness.
The money will be dispensed through a three-year pilot scheme by the Thalidomide Trust - and if successful the deal could be extended.
A bit more info on the Thalidomide drug
- Developed in Germany in the 1950s- Prescribed as a 'wonder drug' for insomnia, coughs colds and headaches. Also given to pregnant women to relieve the symptoms of morning sickness
-Link with birth defects shown in 1961 leading to the drug being taken off the market
-Affected babies commonly suffered missing or deformed limbs and severe shortening of arms or legs-The drug also causes malformations of the eyes and ears, heart, genitals, kidneys and digestive tract and many babies would have died before birth
-Until earlier this year it had not been clear exactly how Thalidomide caused birth defects but scientists now believe it affects the growth of new blood vessels in the developing embryo
Thalidomide was withdrawn after 2,000 babies were born with limb deformities and other damage.
In the 1970s, the drug's UK manufacturer, Distillers Biochemicals, paid out around £28m compensation following a legal battle.
Campaigners said they had wanted justice to help ease the lives of those who for 50 years have struggled daily with "terrible deformities".
They also hope a further £5m could be provided if Scotland, Wales and Northern Ireland contribute to the fund.
The Thalidomide Trust will be responsible for distributing the £20m Department of Health grant to help meet the health needs of those affected.
The Department of Health said it will also look at how this approach - working through an expert national body - might be applied to other small groups of patients who have specialised needs but are geographically dispersed.
"2009 is the 50th year of the first thalidomide babies being born in Britain and the thalidomide disaster is the biggest peace time disaster to happen in this country so it is surprising it's taken so long."
The effects of thalidomide on unborn/new born babies was horrendous. Normally I am against big payouts etc, but here... every little helps.
Still does not give back what was taken away.
"For too long, we have been a passively tolerant society, saying to our citizens 'as long as you obey the law, we will leave you alone'" - David Cameron, UK Prime Minister. 13 May 2015.