Puget Sound Energy has announced an agreement to close two of its Montana coal-power generating units by July 2022. The Colstrip Generating Station is considered one of the highest-polluting coal plants in the country.

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OLYMPIA — Puget Sound Energy has reached an agreement to close part of its Montana coal-fired power plant by 2022, the company announced Tuesday.

Under a settlement with the Sierra Club and Montana Environmental Information Center, PSE and Talen Energy will shut down the two oldest units of the Colstrip Generating Station, which the companies co-own, by July 1, 2022.

In return, the environmental organizations will drop their allegations that the plant has violated the federal Clean Air Act, which stem from a 2013 lawsuit filed with the U.S. District Court in Missoula.

The Clean Air Act allows the U.S. Environmental Protection Agency and Department of Justice 45 days to review the settlement and possibly intervene or comment, according to court records.

The proposed settlement represents a big step in a complex problem that has vexed Washington state officials, lawmakers, environmentalists and the company for years. It also raises the question of what form of energy PSE will choose to replace Colstrip.

The Colstrip station — which includes four operating units — supplies about 20 percent of the power used by PSE, which has 1.1 million customers in the Puget Sound area, including parts of King County.

The station is considered one of the major polluting coal facilities in the country, according to studies by environmental-advocacy groups using government data.

The settlement allows PSE to avoid potentially costly pollution controls at the two units in the future, as well as move toward energy that’s considered cleaner than coal.

“Our customers expect PSE to be good stewards of the environment and to keep energy costs reasonable,” Kimberly Harris, PSE’s president and CEO, said in a written statement. “The eventual closure of Units 1 and 2 at Colstrip without the risk of further legal proceedings or additional significant investments in the units to meet regulatory requirements enables us to accomplish both of these goals.”

The Washington Utilities and Transportation Commission, which regulates PSE and approves its rate changes, has been concerned that the high cost of pollution controls or carbon pricing in the coming years could make Colstrip not viable financially compared with other energy sources.

In a statement, Gov. Jay Inslee said the settlement will allow the company to manage its risks while reducing pollution.

Bill Arthur, deputy director of the Sierra Club’s Beyond Coal Campaign, called the settlement a “big step for Washington and the Pacific Northwest’s future without coal and for meeting Washington state climate pollution goals.”

The company and Washington state lawmakers have struggled in recent years over what to do about the plants, in part because of their complex ownership structure.

The settlement keeps open the two newer, more efficient units, which PSE co-owns with five other companies.

A spokesman for PSE has previously said all viable alternatives, including natural gas, wind and solar power — or a combination — could be used to replace the energy lost by the closure.

In his statement, Arthur called for the replacement power to be “based upon 100 percent clean energy.”