The Czech government says it has signed agreements with representatives of 16 churches to pay them billions of dollars in compensation for property seized by the former communist regime.
The Czech Republic is considered one of world's nations with the most non-believers.
"It is mainly an act of justice because this step redresses certain wrongs that were done to churches and religious communities during the communist regime," Prime Minister Petr Necas said at a press conference after the signing.
"At the same time the foundations of new modern relations between the State on the one hand and the churches and religious communities on the other have been laid."
The deal was opposed by opposition groups such as the Social Democrats on constitutional grounds and the signing was not open to the media.
Over the next 30 years, the government will pay out 59 billion koruna (US$3.1 billion) in financial compensation to Roman Catholic and Protestant churches.
The government will at the same time gradually cut back its payment of churches' expenses over the coming 17 years.
One of the churches covered by the law, the Czech Baptist Union, said it would not sign a contract with the government for the time being, but would make a decision around April 20.
The Czech government said it signed the deal following years of claims by churches based on the law on return of property to churches.
The Global Index of Religiosity and Atheism says that after China and Japan, the Czech Republic is the nation with the highest number of people saying they are convinced atheists, standing at 30 percent.
Ghana with 96 percent of people describing themselves as religious has the highest percentage of believers.
Before the Communists seized power in 1948, most of the people in what was then Czechoslovakia were Christians.
All property owned by the churches was confiscated all the property owned by churches and the regime persecuted many priests and nuns. Churches were strictly controlled and minister' were paid by the State.
Legislation passed in November stipulated that churches would get back land and real estate, confiscated from them by the communist regime, worth 75 billion koruna ($3.9 billion).
The 59 billion koruna in financial compensation is for unreturned property over the next 30 years.
The largest sum of 47 billion koruna ($2.52 billion) will go to the Catholic Church.