Ratepayers will pay $5 million to a Windsor couple who had three lots of land resumed in 2006 for the 4.8 kilometre tunnel, after they rejected council's initial $3.2 million offer.

Paul and Eunice Kelsall then repeatedly rejected compensation offers made by the council in the ensuing eight-year legal wrangle, countering with claims of their own as high as $80 million.

Mr Kelsall's mother, an invalid pensioner who occupied one of the resumed properties, was forced to find a new home.

She died in May 2011.

Mr Kelsall and his wife owned two properties forcibly acquired by council at 105 and 109 Lutwyche Road, Windsor, which, at a combined 2671 square metres, was valued at $2.67 million by independent valuers in 2006.

Mr Kelsall's mother's adjoining property, 539 square metres at 26 Earle Street, Windsor, was valued at $529,000.

The Kelsalls rejected the $3.2 million offer and sought $16.5 million, which was refused by the council.

In August 2011, council paid $3.2 million in compensation to the Supreme Court but the negotiations continued through the Land Court, with the Kelsalls seeking, at various junctures, $80 million and $30 million.

Council documents presented at Tuesday's meeting at City Hall described the court proceedings as "protracted and difficult" and the Kelsalls' claims as "completely extravagant".

The documents said the couple based their claims on potential value the site could bring.

"These claims have been put on the basis that the resumed lands could be put to a very high order of use involving very many stories and residential, commercial and retail uses," the document read.

By May 2014, four years after the tunnel opened, the couple had engaged the services of a QC, who sought $11.17 million on their behalf.

At mediation on May 20, the two parties agreed on $5 million, which council approved on Tuesday.