Hundreds of wrongly convicted Post Office operators will be able to access a new compensation scheme, the UK government has announced.

About 900 individuals had their criminal convictions quashed earlier this year by legislation introduced in May to exonerate people who had been wrongly prosecuted for financial shortfalls using evidence from the Post Office’s Horizon IT system.

The scandal has been described as the biggest miscarriage of justice in recent legal history and it has since emerged that Horizon suffered from a number of bugs and defects.

The Department for Business and Trade said it was launching a Horizon convictions redress scheme which it will administer.

Those who have been wrongly convicted will receive a letter confirming their conviction has been quashed and providing further information on how to access the financial redress scheme. The government has also said it will help victims access historical data from the Post Office and HMRC to assist with their case.

Jonathan Reynolds, the business and trade secretary, said victims could choose from two options: either take a fixed settlement of £600,000, or have a full claim assessment if they believe their losses exceed that sum.

The government has said that regardless of the option they choose, the post office operators who qualify for compensation will receive a preliminary payment of £200,000.

“Recognising that postmasters have suffered immeasurably already, we are also ensuring that regardless of the settlement they choose, they will be able to receive a preliminary payment of £200,000,” Reynolds said.

The Post Office scandal ignited earlier this year after a powerful ITV drama, Mr Bates vs the Post Office, documented the campaigner Alan Bates and 554 post office operators’ fight for justice in their high court lawsuit. The litigation paved the way for the criminal convictions to be overturned after the high court judge ruled that Horizon was not “remotely robust” and suffered from bugs, errors and defects.

More than 900 post office operators were convicted in the criminal courts using evidence from the Horizon system including 700 convictions secured by the Post Office between 1999 and 2015.