News International has already made several out-of-court settlements with alleged victims of phone-hackingCredit: Sean Dempsey/PA
Victims of phone hacking will now be able to apply to the compensation scheme set up by News International in April.
Applications to the fund will be arbitrated by former high court judge Sir Charles Gray, who will assess the payout based on estimated damages in a civil case.
As an incentive to join the scheme rather than pursue a case through the courts, News International will award uplift whatever amount is decided by Gray by 10 per cent.
Applicants will also have "reasonable" legal costs paid, and be granted confidentiality.
A dedicated part of the News International site was made live today for those who wish to apply to the publisher.
Gray said: "I am confident the scheme, which is now operational, will provide a fair, effective, and speedy means for determining compensation in these cases.
"It should provide very significant benefits to applicants such as avoiding the enormous expense of court proceedings. I look forward to adjudicating awards under the scheme, at all times safeguarding the fairness of the process and the rights of applicants."
News Group Newspapers, the News International division that published the News of the World, has also reached settlement agreements with several celebrities dating back to 2008. That year, former PFA chief Gordon Taylor won £700,000 in an out-of-court settlement, which was followed by a reported £1 million settlement with publicist Max Clifford.
In May this year, actor Sienna Miller was paid £100,000 and her stepmother Kelly Hoppen later received £60,000, and in June, former Sky Sports presenter Andy Gray was awarded £20,000.
Other celebrities to have won compensation from the publisher include Leslie Ash and her partner Mark Chapman, who received an undisclosed sum in August understood to be at least £100,000.
The compensation scheme is being overseen by News Corps' Management and Standards Committee, with administrative duties being handled by law firm Olswang.