The state required the company to pay $6.2 million in fines for safety violations found at the Riverview plant.
The first payoff given to the city will be used for a new emergency notification system.
"Out of every tragedy there is some good," Mayor Tim Durand said.
"In the future, should an incident such as this happen at the plant or anywhere else, or even a natural disaster, we will be able to notify residents much more affectively."
Three workers were killed and nine were injured when fire erupted on a 25,000-gallon railroad tank car full of methyl mercaptan.
About 2,500 people were evacuated from homes in the surrounding area. A number continue to experience health problems from exposure to the chemical, used to produce agricultural and pharmaceutical products.
Durand said the donation would cover most of the expected $130,000 cost of emergency response improvements, which are expected to be in place by Sept. 15.
The system, developed in response to the accident, includes four sirens, an AM radio station and a procedure to call residents at home with instructions during any emergency.
All four of the sirens will be on property owned by the city and have a radius of 5,200 feet with overlapping coverage that will also cover nearby areas of Brownstown Township, Southgate, Trenton and Grosse Ile.
The AM radio broadcast would be activated with the sirens.
First Call, based in Louisiana, will provide the telephone call system. The company will have phone numbers for every resident of Riverview and make calls to the entire city, or specific areas, as needed.
Under another part of the agreement, six more Riverview firefighters will receive special chemical firefighting training at a cost of $30,000.
Fire Marshal Timothy Bosman and Lt. John Wilson already have attended the training at Texas A&M University in April.
Fire Chief Robert Hale said the first round of training was a success.
"They got a good firsthand working relationship with the people from ATOFINA," he said. "It's almost impossible to duplicate the training here. It's world-class, first-class training."
The other firefighters are expected to attend the same training this fall, Hale said.
Connie Wickersham, spokeswoman for ATOFINA, said other aspects of the agreement should begin this fall.
That includes a community open house at the plant designed to provide information regarding health, environment and safety issues.
Equipment also will be given to some local schools to assist in chemical emergency awareness.
An $80,000 scholarship fund also will be set up in memory of the three employees killed during the accident.
Grosse Ile will receive $50,000, and Trenton and Wyandotte each will receive $25,000 to fund community notification systems.
The rest of the $6.2 million settlement will be spent on plant improvements.
A list of more than 20 violations found during the investigation includes inadequate emergency response procedures and actions July 14.
The Michigan Department of Consumer and Industry Services findings showed "lives were lost in the accident because plant management did not diligently prepare for emergencies inherent when using dangerous chemicals."