Although the bank’s chief executive, Peter Sands, refuted the claims and said only $14m of transactions broke US sanctions, the settlement was agreed after ongoing negotiations with the regulator. Wednesday’s hearing has now been adjourned, according to the BBC.

A statement from the regulator said: “The New York State Department of Financial Services (DFS) and Standard Chartered Bank have reached an agreement to settle the matter raised in the DFS order dated 6 August 2012.

“The parties have agreed that the conduct at issue involved transactions of at least $250bn.”

However, Standard Chartered still faces probes from other regulatory bodies for the claims as Bloomberg reported the US Treasury, Federal Reserve, Justice Departmern and Manhattan District Attorney declined to agree to a joint settlement.

The fine does not take into account all of the alleged violations including covering up similar transanctions with Sudan.

The settlement follows an array of regulatory issues for British banks which have resulted in a £290m fine for Barclays, for fixing the rate of LIBOR, while HSBC reportedly faces a $1bn fine for allowing drug gangs to launder money through its systems.

Shares in the bank were 3% higher at £14.11 in early trading in London.