She granted a global settlement in the multi-million dollar civil suit stemming from the breech at the Kaloko dam.
"It was a tremendous tragedy. There was a lot of emotion involved, especially for the plaintiffs," attorney for the state Kenneth Robbins said.
Seven people died when the dam burst in March, 2006. The victims included a toddler and a woman who was pregnant.
One of the plaintiff's attorney's called the settlement a "good day for justice" for relatives of the deceased.
"It's been a very, very emotional case. They lost loved ones. Their lives were completely upended," Teresa Tico said.
James Pflueger was the main defendant. He owned Kaloko dam. His attorney says Pflueger doesn't oppose the settlement.
"If we could all come together, forget about our individual differences, forget about the legal issues, just try and reach a resolution that would give some comfort to the victims, Mr. Pflueger's all in favor of that," Bill McCorriston said.
"It is hoped by this court that there will be closure finally for the families who have lost loved ones and for the property owners who have suffered severe losses," Watanabe said in issuing her ruling.
The dam burst released an estimated 400 million gallons of water that swept over Kilauea. It did about $100 million in property damage. Twenty-five of the plaintiffs are homeowners.
There are sixty plaintiffs in the case. The judge said the terms of the settlement will not be released.