The Commonwealth Bank has agreed to pay $700m to settle civil proceedings relating to breaches of anti-money laundering and counter-terrorism financing laws.

If the federal court accepts the offer it will be the largest civil penalty in Australia's corporate history.

The announcement follows court-ordered mediation between CBA and the government's financial intelligence agency, Austrac. The deal would close civil proceedings against CBA, which began 10 months ago.

In August Austrac announced it was suing CBA for 53,700 alleged breaches of money laundering and counter-terrorism financing laws. The case related to CBA's use of intelligent deposit machines, a type of ATM launched in 2012, which let customers anonymously deposit and transfer cash.

The investigation, undertaken in partnership with federal police, NSW police and Western Australia police, found that the machines were being used to launder the illicit proceeds of crime.

CBA has agreed to pay a civil penalty of $700m and Austrac's legal costs of $2.5m to end the matter. It had originally provided for an estimated penalty of $375m.