WASHINGTON (AP) ― HSBC, the British banking giant, will pay $1.9 billion to settle a money-laundering probe by federal and state authorities in the United States, a law enforcement official said Monday.

The probe of the bank ― Europe’s largest by market value ― has focused on the transfer of billions of dollars on behalf of nations like Iran, which are under international sanctions, and the transfer of money through the U.S. financial system from Mexican drug cartels.

According to the official, HSBC will pay $1.25 billion in forfeiture and pay $655 million in civil penalties. The $1.25 billion figure is the largest forfeiture ever in a case involving a bank. Under what is known as a deferred prosecution agreement, the financial institution will be accused of violating the Bank Secrecy Act and the Trading With the Enemy Act.

The official spoke on condition of anonymity because the source was not authorized to speak about the matter on the record. 

Under the deferred prosecution arrangement, HSBC will admit to certain misconduct, the official said, but the details of those admissions to be made in a New York court were not immediately available late Monday. Nevertheless the deferred prosecution agreement means the bank won’t be prosecuted further if it meets certain conditions, such as strengthening its internal controls to prevent money laundering. The Justice Department has used such arrangements often in cases involving large corporations, notably in settlements of foreign bribery charges.

The law enforcement official said an announcement of the agreement could come as early as Tuesday.

The London-based bank said it is cooperating with investigations but that those discussions are confidential.

In regard to HSBC and Mexico, a U.S. Senate investigative committee reported that in 2007 and 2008 HSBC Mexico sent to the United States about $7 billion in cash. The committee report said that large an amount of cash indicated illegal drug proceeds.

Money laundering by banks has become a priority target for U.S. law enforcement.

In another case Monday, a British bank, Standard Chartered, which was accused of scheming with the Iranian government to launder billions of dollars, signed an agreement with New York regulators to settle their investigation with a $340 million payment.

Since 2009, Credit Suisse, Barclays and Lloyds all paid settlements related to allegations that they moved money for people or companies that were on the U.S. sanctions list.

Last summer, the Senate investigation concluded that HSBC’s lax controls exposed it to money laundering and terrorist financing.

HSBC bank affiliates also skirted U.S. government bans against financial transactions with Iran and other countries, according to the report from the Senate Permanent Subcommittee on Investigations. And HSBC’s U.S. division provided money and banking services to some banks in Saudi Arabia and Bangladesh thought to have helped fund al-Qaida and other terrorist groups, the report said.

The report also blamed U.S. regulators: It said they knew the bank had a poor system to detect problems but failed to take action.

Sen. Carl Levin, D-Mich., the committee chairman, cited instances in which HSBC had promised to fix deficiencies after being sanctioned by regulators but failed to carry through.

Levin also said the Office of the Comptroller of the Currency, the U.S. agency that oversees the biggest banks, tolerated HSBC’s weak controls against money laundering for years and that agency examiners who had raised concerns were overruled by their superiors.