The agreement focused on alleged violations of US security laws and prevented the US Securities and Exchange Commission (SEC) taking enforcement action.
Xerox, however, neither admits nor denies the allegations. It must "re-state" its accounts from 1997 to 2000 to reflect lease revenues for over 1.4bn.
Xerox chairman and chief executive Anne Mulcahy said her firm was best served by putting the matter behind it.
"We have made substantial improvements through a bold turnaround programme in the past year," she said. "When faced with difficult decisions we take appropriate actions."
She said the lease values would not change.
The dispute centred on how Xerox reported money from equipment leases, sold under "bundled" contracts including service, finance and supplies.
The SEC queried when Xerox reported the revenues and how it classified income. The timing and allocation of its revenues are to be adjusted.
The commission launched a Xerox probe following scandals at its Mexican set-ups.
Story by Jez Abbott
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"Sorry to read this, a big name to go down, hopefully a lot of the £1.8M was insured. We are recruiting operational staff & currently in-talks to assist the clients with immediate requirements."
"£1.8m !! Very big numbers indeed."
"Now black really is white. Ditching a product line with all its consequences for customers is now an award winning move. Priceless!"
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