It was the first time the authorities had paid compensation for those who perished when the security forces crushed the February-March 2011 protests, leaving 35 people dead, according to an independent inquiry.
The Tuesday statement said the compensation payments came in response to a recommendation by the Bahrain Independent Commission of Inquiry, set up by King Hamad to probe allegations of government wrong-doing and excessive use of force by the security forces.
"Acting upon recommendations in the (BICI) report … [the government] announced the disbursement of $2.6-million to the families of 17 deceased individuals," the statement said, adding that the "average payout came to just under $153 000 per family."
The payouts were ordered by King Hamad himself and were aimed at addressing "grievances … caused by recent unrest," the statement said.
It added that other potential recipients of compensation include families of individuals who "suffered physical injury and any other cases deemed appropriate by the justice ministry".
In a separate announcement on Tuesday, the government said the kingdom's High Criminal Court filed murder charges against three police officers, including one lieutenant, for their role in the deaths of three people during last year's protests.
The policemen were originally charged with manslaughter but "are now facing murder charges in the deaths of Ali Ahmed Abdulla, Isa Abdul Hassan and Hani Abdulaziz Goma in three separate incidents," the statement said.
Manslaughter carries a maximum sentence of seven years in Bahrain, according to the statement. Murder charges carry a sentence of "life imprisonment or even the death penalty."
If found guilty, the policemen "are likely to receive the toughest penalties allowed by law," the statement added.
A fourth policeman was sentenced to five years in prison for assaulting a protester, but remains in hospital after sustaining serious injuries in a bomb attack on police on April 24, it added.
Protests have intensified in villages around the capital since the March 2011 crackdown.
Amnesty says 60 people have been killed since the protests erupted in February 2011 in the Shi'ite-majority Gulf kingdom ruled by the Sunni Al-Khalifa dynasty. – Sapa-AFP