The Justice Department announced an $88 million settlement on Thursday with victims of a self-proclaimed white supremacist who shot dead nine Black parishioners in a historic church in South Carolina in 2015.

The settlement stems from allegations that the FBI was negligent when it failed to prohibit the sale of a gun by a licensed firearms dealer to the shooter, Dylann Roof, the Justice Department said.

Roof, 27, who prosecutors said carried out the shooting to spark a "race war," is facing the death penalty for the massacre at the Emanuel African Methodist Episcopal Church in Charleston, one of the oldest African-American churches in the southern United States.

"The mass shooting at Mother Emanuel AME Church was a horrific hate crime that caused immeasurable suffering for the families of the victims and the survivors," Attorney General Merrick Garland said, announcing the settlement.

"Since the day of the shooting, the Justice Department has sought to bring justice to the community, first by a successful hate crime prosecution and today by settling civil claims."

The Justice Department said the settlement resolves claims from the families of the nine fatalities from the shooting and from the five survivors who were inside the church at the time of the attack. 

It said the settlements range from $6 million to $7.5 million for relatives of the nine victims and $5 million each for the five survivors.

"The nation grieved following the mass shooting at Mother Emanuel, and no one was more profoundly affected than the families of the victims and the survivors we have reached a settlement with today," Associate Attorney General Vanita Gupta said.

"The department hopes that these settlements, combined with its prosecution of the shooter will bring some modicum of justice to the victims of this heinous act of hate."

The families of the "Emanuel Nine" and the survivors sued the government for wrongful death and physical injuries.

They claimed the FBI's National Instant Criminal Background Checks System (NICS) failed to discover in a timely manner that Roof was prohibited by federal law from possessing a firearm.

The NICS requires federally approved gun dealers to ask potential customers to fill out forms that are transmitted to the national database. Roof should not have been authorized to buy guns since he had been arrested previously for a drug offence.

Roof sat in on a Bible study group at the Mother Emanuel church in downtown Charleston on June 17, 2015 and opened fire as the parishioners were beginning their closing prayer.