A proposed $586 million settlement to end investor lawsuits over the pricing of initial public offerings during the late 1990s stock market boom has won preliminary approval from a federal judge.

Judge Shira Scheindlin, in a ruling made public on Thursday, scheduled a fairness hearing on the proposed settlement for September 10 in U.S. District Court in Manhattan.

She must give final approval before the money can begin to be distributed to investors.

The settlement, significantly less than investors had once hoped to receive, would end more than eight years of litigation in more than 300 lawsuits against 55 investment banks and more than 300 companies that went public at the height of the technology stock bubble.

The plaintiffs contend that the prices of many IPOs were manipulated, costing them billions of dollars when technology stocks careened earlier this decade. They say the IPO underwriters required them to buy shares often at inflated prices, and to pay the underwriters undisclosed compensation. The defendants have denied any wrongdoing.

Earlier efforts to settle the case for more than $1 billion fell apart as the litigation went through appeals.

Scheindlin said it was now in the plaintiffs' best interests to resolve the case quickly, saying that in the current economic climate a bigger settlement was unlikely.

Simply put, plaintiffs cannot expect to receive a similar recovery to that they had hoped to receive during more bullish years, she wrote.

The bank defendants included Credit Suisse Group AG , JPMorgan Chase & Co , Morgan Stanley and Goldman Sachs Group Inc . The judge's ruling did not disclose how much each bank would pay into the settlement fund.

The case is In re: IPO Securities Litigation, U.S. District Court, Southern District of New York, No. 21 MC 92.

(Reporting by Martha Graybow; editing by John Wallace and Matthew Lewis)