It's over its ratings of risky mortgage securities in the run up to the global financial crash in 2008.
The US Justice Department says Moody's reached the deal on Friday, to resolve allegations that it contributed to the worst financial crisis since the Great Depression.
It will pay over €411m to the US Justice Department with the remaining €400m split among the 21 US states involved in the investigation – as well as the district of Columbia.
Moody's has also agreed to a number of measures to ensure the integrity of future credit ratings and its chief executive must certify compliance with the measures for at least five years.
Moody's is not the first ratings agency to reach a settlement with US authorities.
The world’s largest ratings firm, Standard and Poor’s entered into a similar deal in 2015 – paying out €1.29bn.
