The state has agreed to pay $6.75 million to settle a suit brought by the grandparents of two young girls who were sexually abused by their parents while under the supervision of New Hampshire’s Division for Children, Youth and Families.

The lawsuit alleged DCYF and two nonprofits — Easterseals New Hampshire and CASA-NH — failed to protect the two girls from “horrific” sexual abuse by their biological parents in 2013 despite repeated warning signs.

The girls’ grandparents sued DCYF, alleging the parents were allowed to have unsupervised visits with the girls, even though police were investigating reports they had molested other children at a homeless shelter.

After one visit in November 2013, the girls’ grandmother saw the younger girl rubbing a paintbrush against her genitals and when asked what she was doing answered, “Mommy and Daddy do it — no they don’t, don’t tell, I’ll get in trouble!” The grandparents immediately went to police, and the parents were arrested about 10 days later.

That visit came two months after Claremont police notified the Division for Children, Youth and Families that several children at a homeless center reported the girls’ father had molested them, the lawsuit states.

Under the settlement, each child will receive $3.125 million and their grandparents, who have adopted the girls, will receive $500,000. The money will come from the state’s general fund and will be released as soon as Hillsborough County Superior Court Judge Gillian Abramson officially signs off on the deal, said Rus Rilee, the attorney representing the family.

The girls’ parents pleaded guilty in 2014 to felony sexual assault charges and to manufacturing child pornography. Each was sentenced to 25 years to life in prison. The suit alleged the abuse took place during supervised and unsupervised visits, sometimes during “bath time,” when an Easterseals worker was in another room.

The two girls, who were ages 4 and 18 months at the time of the abuse, badly need treatment and counseling, Rilee said.

“They’re not doing well. They need serious treatment. And now they’re going to be able to afford it,” he said.

Associate Attorney General Anne Edwards said the settlement was not an admission of wrongdoing on the state’s part, but an attempt to get the girls the help they need.

“Litigation is not a process that is trauma-informed. And it’s a process that can be damaging to plaintiffs and, in this case, the state’s concern was to be able to ensure that these girls would be able to receive the treatment and care that they need to be able to move into healthy adulthood,” she said.

The state has made larger total payouts in civil injury settlements before, Edwards said, but this agreement represents the largest amount paid to an individual plaintiff.

Abramson still has to rule on attorney’s fees. Rilee has asked the court to override the 25 percent limit set for cases involving children. The Attorney General’s Office has objected.

“We wanted to make sure that those funds stayed with the girls to make sure to provide them with the treatment and care that they need,” Edwards said.

In a statement, Health and Human Services Commissioner Jeffrey Meyers said the state pursued the settlement “in order to ensure that the children involved are able to access the care that they need to lead successful lives after suffering terrible abuse, and to provide compensation for the adoptive parents, who are their biological grandparents.”

“The Department and DCYF, with the full support of Governor Sununu and the Legislature, are currently engaged in a broad transformation effort at DCYF to ensure that this type of abuse and abuse of any kind is not suffered by other children and families,” he added.

Settlements with CASA and Easterseals are confidential.

A judge in December dismissed all claims against CASA, ruling that judicial immunity extended to the organization because its volunteers act as an arm of the court. But that ruling was under appeal at the time of the settlement agreement.

The lawsuit also brought key rulings, including one from the state Supreme Court, establishing the rights of plaintiffs in child abuse cases to sue in open court. Before, such cases were kept completely under seal to protect the privacy of children. Rilee had argued the state’s Child Protection Act had been interpreted too broadly, and that a child’s identity could be protected even if a complaint were made public.

“Transparency breeds accountability, and accountability brings change,” Rilee said.

DCYF has been under intense scrutiny since two toddlers under agency watch were killed by their mothers in 2014 and 2015. Lawmakers have since created an independent Office of the Child Advocate to oversee the agency and funded more caseworkers.

Rilee also represents William Boucher Jr., the father of Brielle Gage, a 3-year-old from Nashua who was murdered by her mother, Katlyn Marin, while under DCYF supervision in 2014. Boucher filed suit this February against the agency, which was warned about repeated abuse for a year before Brielle’s death.

Information from The Associated Press was used in this report.

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