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The Tau Cygna system was a system in the de Laure belt. This system was located over 5,000 light years from the Sol Sector, within the de Laure belt. According to Section 133, Paragraph 77 of the Treaty of Armens, the planet had been ceded from the Federation to the Sheliak Corporate in 2255.
In the late 23rd century, the colony ship SS Artemis landed on the fifth planet. The survivors built a colony which lasted for nearly a century. However, under pressure from the Sheliak Corporate, the colonists were relocated to a new home. (TNG: "The Ensigns of Command")