President Donald Trump has agreed to drop his family’s lawsuit against the IRS as part of a highly unusual agreement that establishes a nearly $1.8 billion fund to compensate those who, like him, have claimed they have been targets of a “weaponized” justice system.

The deal, laid out in a two-page summary and a Justice Department news release, creates what officials described as an “Anti-Weaponization Fund” with broad authority to distribute payments to individuals — all with limited oversight and outside of the normal processes for negotiating legal claims against the government.

It is the latest, and by far the most sweeping, tool the president has aimed at financially rewarding supporters and political allies he asserts have been wronged by Democratic administrations. Under the settlement’s terms, the president and his family would be excluded from receiving any money, officials said.

Legal experts and ethics watchdogs quickly panned the fund as a product of self-dealing that was negotiated between the president and agencies he oversees at the taxpayers’ expense.

“This is one of the single most corrupt acts in American history,” said Donald K. Sherman, president of the nonprofit Citizens for Responsibility and Ethics in Washington. He noted that although Trump sued the IRS as a private citizen, the officials representing the Internal Revenue Service and the Treasury Department in settlement negotiations ultimately report to him.