Each Smith & Wesson gun will be fired before sale to create a digital fingerprint of the shell casing. That image will be coupled with an internal serial number and kept in a federal computer system.
That way, bullets and gun shell casings left at a crime scene could be traced to the purchaser of the gun.
Smith & Wesson agreed to additional marketing changes, including restrictions on advertising that could appeal to children or criminals, packaging with safe gun storage tips, a requirement that gun stores selling Smith & Wesson products adopt a strict security system and keep unaccompanied minors out.
The agreement ends legal action that began more than two years ago, when New Orleans filed suit against Smith & Wesson and about 24 other gun manufacturers, demanding changes in the way they make and market their products. Inspired by the settlement reached between the states and the tobacco industry, gun control proponents were taking to the courts to effect changes they could not secure through legislation.
Since then, about 30 other local governments have filed lawsuits or joined others, and in December, Clinton announced that the Department of Housing and Urban Development -- on behalf of public housing residents -- would file suit itself if a reasonable settlement could not be reached.
With Smith & Wesson's capitulation, the tobacco model could be holding, said Richard Blumenthal,
attorney general of Connecticut. In the case of tobacco, the Liggett Group broke ranks with the rest of the industry and settled, creating a crack in the tobacco company dam that ultimately led to its collapse of the industry's united front.
But Liggett was the smallest of the tobacco companies under legal threat. Smith & Wesson, as the largest manufacturer, is "the icon of the industry," said Andrew Cuomo, HUD secretary. That could mean an even faster resolution to the gun control lawsuits, he said.
Smith & Wesson made it clear yesterday that the company was driven to the agreement by the lawsuits. The settlement would ensure "the viability of Smith & Wesson as an ongoing business entity in the face of the crippling cost of litigation," the company said in a statement.
"It doesn't change a lot of things in terms of how we do business," said company spokesman Ken Jorgensen. "But it is going to save us a lot of money on the legal side."
Alex Panelas, mayor of Miami-Dade County, Fla., stressed that the deal would be "a floor, not a ceiling" for any other gun maker that wants to sign on.
And the litigants vowed to press on until all the manufacturers joined.
"We're not going to let up on this fight at all," vowed former Maryland Rep. Michael Barnes, president of Handgun Control Inc., whose legal arm has coordinated the lawsuits. "We're going to get more aggressive.
Sun staff writers Karen Hosler and Michael Dresser contributed to this article.