The automaker has admitted that its employees knew of problems with the ignition switch as early as 2004, but did not start recalling 2.6 million vehicles until February 2014.
The flaw caused some cars to shut off while driving, disabling airbags, anti-lock brakes and power steering.
As part of the deal, the automaker has agreed to make changes to its internal safety practices. The fine is the maximum GM can be fined for a single violation.
A senior law enforcement official tells CNN that GM could still face additional fines from a separate FBI probe.
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