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Published 16:06 16 Nov 2021 GMT
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Legislation is also being recommended to preserve and give access to records of those institutions that have been under fire.
Speaking alongside First Minister Paul Givan, O'Neill spoke ahead of her announcement in the Assembly chamber.
"I believe that this is a watershed moment for the women and adult children of mother-and-baby institutions, Magdalene laundries and of workhouses," she said.
"And we must remember that this will be a difficult and emotional day for many.
"Our thoughts are very much with all the victims and survivors, who were so grievously failed and have lived for many years with the unimaginable pain and trauma inflicted on them."
An academic research report was published earlier this year that showed the mistreatment of thousands of women and girls from these institutions.
The research was carried out by Queen's University and Ulster University and found that over 14,000 girls and women went through the doors of mother-and-baby homes, Magdalene laundries and other institutions between 1922 and 1990.
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