ST. PAUL — The federal Environmental Protection Agency has agreed to reverse its approval for a variance that lets the Mesabi Nugget plant near Hoyt Lakes violate Minnesota water quality standards.

In a settlement filed in federal court Monday, the EPA says it now intends to disapprove the variance, which it approved in 2012. The decision still requires court approval.

Two environmental groups and two Chippewa bands sued the EPA last year to block the variance, saying it improperly allowed the iron nugget plant to discharge four pollutants in violation of Minnesota standards, threatening wild rice and other aquatic organisms.

WaterLegacy and the Minnesota Center for Environmental Advocacy say the EPA’s decision means Mesabi Nugget must comply with established standards.

Mesabi Nugget officials didn’t immediately return a phone call seeking comment Tuesday.