The U.S. Food and Drug Administration will decide by March 31 whether to ban a chemical used in water bottles, soup cans and other food and drink packaging that may cause harm to developing babies and young children.

The industrial chemical bisphenol A, or BPA, has been used for decades to make plastic and epoxy resin used in the production of packaging for food and beverage products.

In 2010, Canada declared BPA a toxic substance. It is already banned in the production of baby bottles in Europe and Canada.

The FDA agreed to rule on whether to ban BPA use in food and beverage packaging as part of the settlement of a lawsuit reached on Wednesday with the Natural Resources Defense Council, the NRDC said in a news release. The FDA confirmed the settlement details.

Consumer concern has already led to discontinuation of BPA use in the production of baby bottles and sippy cups in the United States, the NRDC said. But use of the hormone-disrupting chemical remains widespread in food packaging.

Bisphenol A can leach into food and water from the protective coatings of canned foods and from plastic bottles. Human exposure to the chemical been found to be widespread, although it has not been definitively shown to cause harm to adults.

"Every day, millions of American consumers are exposed to this dangerous chemical, commonly used in packaging for canned foods, beverages and even baby formula," Dr. Sarah Janssen, a senior scientist in the Environment and Public Health program at NRDC, said in a statement. "The FDA has an obligation to protect us from toxic food additives."

In 2008, NRDC filed a petition with the FDA requesting a ban on BPA in food packaging, food containers and any material likely to come in contact with food.

When FDA did not respond to the petition, NRDC sued in 2010 asking the court to require the agency to respond. The settlement of a case brought before the U.S. District Court for the Southern District of New York requires the FDA to make a decision on BPA use by March 31, 2012.

The FDA has previously acknowledged it had concerns about the chemical's effects on the brain, behavior and prostate glands in fetuses, infants and young children, but has yet to rule on the chemical's use in food and beverage packaging.