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Los Angeles Clippers owner Donald Sterling (R) sits with an unidentified companion as he watches the team play New York Knicks in their NBA game in Los Angeles February 11, 2009. REUTERS/Lucy Nicholson

WASHINGTON (Reuters) - Los Angeles Clippers basketball team owner Donald Sterling has agreed to pay $2.725 million to settle a housing discrimination lawsuit, the U.S. Justice Department said on Tuesday.

Sterling, longtime owner of the NBA team and a real estate mogul, was accused of discriminating against blacks, Hispanics and families with children at apartment buildings he owns.

The government said the payment represented the largest amount ever obtained to settle a case alleging discrimination in rental apartments.

The lawsuit, filed by the department in 2006, alleged that Sterling, his wife Rochelle Sterling and the Sterling Family Trust engaged in discriminatory practices at apartment buildings they own and manage in Los Angeles.

The defendants, who operate their business under the name Beverly Hills Properties, own and manage approximately 119 buildings comprising over 5,000 apartments.

The settlement, which must be approved by a federal judge in California, requires payment of a $100,000 civil penalty and $2.625 million into a fund to be used to pay damages to those harmed by the discrimination.

"The magnitude of this settlement should send a message to all landlords that we will vigorously pursue violations of the Fair Housing Act," said Thomas Perez, assistant attorney general for the Justice Department's Civil Rights Division.

(Reporting by James Vicini, Editing by Alan Elsner)