The federation of Egyptian tourism agencies said on Monday it had paid $140,000 each in compensation to the families of three of eight Mexican tourists killed by mistake last year.
The tourists and four Egyptians were killed by security forces on September 13, 2015 when they came under fire during a lunch break in Egypt's vast Western Desert while on their way to the Bahariya oasis.
Survivors have told Mexican diplomats that came under fire from a plane and helicopters.
Egypt said the tourists had entered a restricted area and were "mistakenly" killed as security forces chased militants.
"The families of three of the victims have each received a bank transfer worth $140,000," said Ahmed Ibrahim, treasurer of the Egyptian Travel Agents Association.
He told AFP the payment was made after the three families agreed not to press legal proceedings against Egypt after their relatives were killed.
Their lawyers signed the agreement last week, he said.
"Negotiations are under way with the other five families in order to close the case definitively," Ibrahim said.
Egyptian foreign ministry spokesman Ahmed Abu Zeid confirmed that an agreement had been reached to compensate three of the eight families.
He said the accord was between the federation and the families and that the Cairo government was not involved.
Ibrahim said the federation agreed to compensate the families after an investigation found that the travel agency looking after the tourists was responsible for their deaths.
In January, Mexican Foreign Minister Claudia Ruiz Massieu said Egypt's tourism ministry "found that the administrative authorities and the travel agency should have had more clarity on the permit, and in that sense would eventually be responsible".