Lake Elmo is building a new well, paid for in large part from the state’s first infusion of money from a multimillion-dollar 3M settlement.

The state is giving the city about $2 million to construct a well with a 1,250 gallons-per-minute capacity.

The money is part of the $850 million court settlement reached last February between Minnesota and 3M Co. over groundwater contaminated by perfluorochemicals, or PFCs.

The city shut down one of its wells and a water tower a year ago after the state Health Department found excessive levels of PFCs. The chemicals were developed and manufactured by Maplewood-based 3M, which dumped factory waste into Washington County landfills. Research shows that exposure to PFCs in drinking water has been linked to types of cancer, thyroid and liver issues, and human developmental problems.

Lake Elmo’s new well will have an increased pumping capacity over the contaminated well, so the city will pay a share of the cost, putting about $240,000 toward the project.

“We’ve been on pins and needles for the last year as we waited for a resolution,” City Administrator Kristina Handt said. “We obviously have some relief that we finally have a direction to move forward in [and] are thankful to the state for working with us on this issue.”

Still, the timeline has felt painstakingly slow, she said.

The city had hoped to begin preliminary work on a new well last fall, when the Minnesota Pollution Control Agency (MPCA) told Lake Elmo it would need to study six different options, including adding a new well.

Other options were blending the contaminated water with water from other wells, connecting with an adjacent water supply and adding treatment plants to one of the contaminated wells.

The study is standard for other cities facing similar concerns, said Walker Smith, spokesman for the MPCA.

“When the announcement of the settlement was made, people or cities thought that ‘here’s this pot of money, here’s what we’d like to do, can we have some of it now,’ ” Smith said. “But the whole intent of the settlement was to come up with a long-term solution to work for the entire region.”

Preliminary work on the new well could start as early as April, but it likely wouldn’t be operating until at least 2020.

That means Lake Elmo still faces the potential for a watering ban this summer as a way to reduce pressure on the city’s two remaining uncontaminated wells.

“It’s too soon to say but [a watering ban] is something we want to get on people’s radar so they aren’t surprised if and when we do have to pull the trigger this summer,” Handt said.