Tesco has been fined £129 million by the Serious Fraud Office (SFO) for overstating its profits in 2014.
The announcement came as the financial watchdog found that Tesco had committed market abuse when it inflated profits by £263 million, later revised up to £326 million, in a trading update in August 2014.
It will pay the fine as part of a deferred prosecution agreement with the SFO, although this deal requires court approval.
"This potential DPA with Tesco Stores Limited does not address whether liability of any sort attaches to Tesco plc or to any employee or agent of Tesco plc or Tesco Stores Ltd," said a statement by the SFO.
In 2015, Groceries Code Adjudicator (GCA) found the retailer breached legally binding rules on fair practice by delaying millions of pounds worth of payments to suppliers.
The Adjudicator was concerned about three key issues: Tesco making unilateral deductions from suppliers, the length of time taken to pay money due to suppliers and in some cases an intentional delay in paying suppliers.
The GCA was not able to act upon this at the time as it had not been granted the power to do so by the government.
'Regret'
The company appointed outsider and former Unilever executive Dave Lewis in July 2014 to replace long-standing chief executive Philip Clarke and oversee a drastic restructuring of the group.
Dave Lewis, the chief executive of Tesco, said the settlement allowed the company to move on: "I want to apologise to all those affected.
"What happened is a huge source of regret to us all at Tesco, but we are a different business now.
"Over the last two-and-a-half years, we have fully co-operated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business."
He admitted the Tesco brand had been damaged by the disclosure of the accounting scandal, but said the company was 'committed to doing everything we can to continue to restore trust in our business and brand.'
Responsibility
Those investors would have had misleading information from a trading statement on 29 August, which gave a better assessment of its performance than was actually the case.
FCA chief executive Andrew Bailey said dissemination of information that gives a false or misleading impression as to traded securities harms the integrity of the markets.
"The FCA is committed to UK markets being fair, transparent and thus competitive.
"Tesco and its board are doing the right thing here, taking appropriate responsibility and agreeing to rectify the consequences of the misconduct.
"They have co-operated fully with us and this sets a good example for the market and so is a good outcome for Tesco and investors."
