BP has agreed a $4.5bn (£2.8bn) settlement with US authorities for claims relating to the Deepwater Horizon oil spill disaster.
It includes the biggest criminal fine in US history of $1.26bn.
The 2010 disaster killed eleven workers and led to the release of millions of barrels of crude oil into the Gulf of Mexico.
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The US Attorney General said the deal is the "largest total criminal resolution in the history of the United States."
He also confirmed tha ttwo BP workers have been indicted on 23 criminal counts. A former BP official is also charged with concealing information from the US Congress.
The oil giant plead guilty to 14 criminal charges:
- Eleven felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives
- One misdemeanour count under the Clean Water Act
- One misdemeanour count under the Migratory Bird Treaty Act
- One felony count of obstruction of Congress
The fine will be paid over five years, under the deal reached with the US Department of Justice and the Securities and Exchange.
BP will also pay an additional $525m (£331 million) to the SEC over a period of three years.
In a statement, BP's Group Chief Executive, Bob Dudley said:
All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region.
From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf.
We apologise for our role in the accident, and as today's resolution with the US government further reflects, we have accepted responsibility for our actions.
BP also said it will "continue to vigorously defend itself" against civil claims and allegations of gross negligence.
"We are open to settlements, but only on reasonable terms," said Mr Dudley.
The company's shares dropped 0.4% to 425.4p after the agreement announcement just before the market close.
But the stock had been higher earlier in the session as investors saw the deal removing some of the uncertainty hanging over the stock since the disaster.
The US Attorney General Eric Holder said of the deal:
It stands as a testament to the hard work of countless investigators, attorneys, support staff workers and other persons from the Deepwater taskforce to advance a complex and wide-ranging investigation that began even before the oil well was capped.
Environment campaigners Greenpeace said:
Today's announcement of a proposed settlement between BP and the US government fails every aspect of the commonly accepted notion of penalty.
This proposed settlement would not hold the guilty accountable for their actions.
This fine amounts to a rounding error for a corporation the size of BP.
– GREENPEACE SENIOR INVESTIGATOR MARK FLOEGEL
Nothing in this proposed settlement gives any oil company incentive to be more careful in future operations. Cutting corners and skimping on safety will still be the rule of the day
BP's record-breaking fine surpasses the previous record $1.3 billion fine (£820 million) paid by drugs group Pfizer in 2009 for marketing fraud related to a pain medicine.
BP has already paid out more than 38 billion dollars (£24 billion) relating to the oil spill.