HP has agreed to pay the Canadian government $US105 million to settle a dispute related to IT contracts that the manufacturer took on when it acquired Compaq Computer.
In March, Canada's Department of National Defence claimed it had been bilked out of the money by a contract-invoicing scam involving payments that were supposedly being made to subcontractors.
HP said there was no evidence that any of its employees derived illegal benefits from the alleged scheme.
But the company said that it decided "to honour its contractual obligations, rather than engage in protracted litigation".
HP said it would try to recover the settlement amount from the individuals and companies responsible.