Gaming giant Tabcorp (ASX:TAH) has entered into an agreement with AUSTRAC to settle the Federal Court litigation between them.

The parties will, within seven days, seek orders from the court for Tabcorp to pay a penalty of $45 million.

AUSTRAC will also withdraw its remaining allegations of Tabcorp failing to comply with anti-money laundering and counter-terrorism financing laws.

AUSTRAC alleged that Tabcorp failed to report 236 instances of large-scale money laundering by crime syndicates.

If the Court agrees to make those orders, then Tabcorp will recognise this penalty as a significant item in its balance sheet this financial year.