Academy of Art University has agreed to pay $20 million and to build 160 units of affordable housing to settle a lawsuit filed by the city of San Francisco over the institution’s widespread land-use violations.

Under the proposed deal, announced Monday, the university will pay the city $20 million in cash over five years, including $7 million to the Small Sites Program, an initiative to prevent displacement of low-income tenants. The remainder will go toward civil penalties, development impact fees and staff time. The sum is the largest award the city has obtained in a code enforcement case.

AAU has also agreed to provide low-income housing for seniors by converting one of its student dormitories in Nob Hill and building affordable apartments on an adjacent lot that the university owns. It has promised to have half of the 160 units ready for occupancy within 18 months and to keep rents affordable for 66 years. The city would have had to invest $40 million to provide these benefits itself, according to the San Francisco Mayor’s Office of Housing and Community Development.

If approved by the city’s Planning Commission and Board of Supervisors, as expected by next fall, the deal will bring AAU into full compliance with city rules. It will also end the lawsuit that city officials filed against the for-profit university in May, after it had spent more than than a decade accruing land-use violations while expanding its real-estate holdings.

“We are very pleased to reach this agreement, which allows the Academy to make significant contributions to San Francisco while maintaining our academic excellence and providing for our students. We look forward to implementing the agreement,” AAU President Elisa Stephens said in a statement.

FORBES reported on the AAU’s land-use violations in an  August 2015 article , which City Attorney Dennis Herrera cited in his complaint. He also cited a  separate article  on the university FORBES published that month, which described AAU’s practice of promising to prepare anyone for a career as a professional artist, often subsidized by federal student loans, while in reality the vast majority of students failed graduate. At the time, FORBES estimated that President Stephens and her father, Richard Stephens, who own the university through a parent company called the Stephens Institute, had built a fortune worth at least $800 million. That included family-owned buildings, held through a network of corporate entities, that the school occupies. Founded in 1929, the privately held university expanded enrollment from 2,200 to around 14,000 students over the past quarter century.

The city’s May complaint accused AAU of failing to address planning-code violations on 23 of its 40-some properties and depriving the city of 300 residential units by illegally converting buildings for school use. The lawsuit sought penalties of at least $200 a day for each planning-code violation and $2,500 a day for each unlawful business practice. The city also demanded that AAU restore affordable housing units that it said were unlawfully obtained. In all, 33 of the university’s buildings faced outstanding violations as of May, planning officials told FORBES.

“Academy of Art University and its real estate affiliates behaved for more than a decade like they were above the law,” Herrera said in a statement. “We’ve ensured those days are over. After years of meeting our good faith with bad faith, the academy has finally agreed to do right by the people of San Francisco… Our work here sends a clear message: No matter how wealthy or politically connected you may be, the same rules apply to everyone.”

The university has already paid more than $1 million in fees and penalties since the lawsuit was filed in May.

Under the proposed settlement, AAU also pledged to limit student enrollment based on the code-compliant housing it has available and to require 50% of students to live on campus (compared to around 20% today), taking pressure off the city’s housing stock. It has promised to equip students and staff with public transit passes and to pare down the routes of its private shuttles. It has also agreed to stop using at least three illegally converted buildings, which are located far from the rest of campus, for university purposes.

“We deny every single allegation in the complaint,” said Jim Brosnahan, one of the university’s lawyers. “The settlement is fair to the city because they get tremendous value, and it’s fair to the academy because it allows it to return to its main mission: the education of art students.” He said that AAU had put forth three offers to resolve its disputes with planning officials before Herrera filed suit.

AAU is expected to file an application for a development agreement with the planning department today, the first step toward the settlement’s approval. The Planning Commission will hold public hearings related to the document over the next several months.