New Mexico unexpectedly broke with the federal government and 17 other states yesterday and resolved antitrust charges against Microsoft.
The deal provided momentum for additional settlements in the historic four-year court case against the software giant.
Microsoft will pay the state's legal costs. New Mexico will share in any future result in the case, which is still in a federal court.
The development came one day after Microsoft's announcement that it would change the way it licenses its Windows operating system to computer makers. The changes address concerns raised by the courts about anti-competitive practices.
New Mexico's attorney general, Patricia Madrid, said: "I was encouraged that Microsoft made some concessions yesterday. That was a very good first step."
Vivek Varma, a Microsoft spokesman, said he "was pleased to have this matter resolved". Mr Varma added that Microsoft was committed to working with other government officials to resolve the remaining issues in the case.
Gina Talamona, a justice department spokeswoman, said the department had no comment.
According to Ms Madrid, any penalties and remedies imposed in the continuing federal antitrust case will be applied to New Mexico. "My job is to do what I think best serves the interests of New Mexico consumers and businesses," she said in a statement.
"An important element of this settlement between New Mexico and Microsoft is that my state will receive the benefit of any and all remedies imposed upon Microsoft in the resolution of this lawsuit with any and all of the remaining litigating states and the US department of justice," she said.
Two weeks ago, a federal appeals court ruled that Microsoft had operated as an illegal monopoly and hurt competitors. But the court reversed the trial judge's order breaking up the company, and sent the case back to a different lower court judge to decide a new penalty.
Shortly after the ruling, both sides hinted a settlement was possible.
Richard Blumenthal, Connecticut's attorney general, said the other states had no advance warning of Madrid's decision and that it was an uncommon turn of events.
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