Toyota has agreed to pay $1.1 billion to about 16 million consumers to settle a class-action lawsuit dating back to 2009.
The lawsuit, one of the largest ever filed against the automotive industry, does not include an admission of fault by the company.
The Japan-based car company has also agreed to pay for the installation of new safety equipment in the 16 million cars, said the Wall Street Journal.
The settlement was a likely move to avoid a lengthy trial by jury.
Toyota has also said they will create a fund to retrofit cars with technology that allows them to stop in a panic situation.
Those that can't be retrofitted will benefit from the cash payouts.
Toyota maintains that the cases of acceleration were mostly due to the gas pedal getting stuck under the floor mats.
In 2009 and 2010 the Japanese automaker recalled over nine million vehicles worldwide despite an outside study concluding that the accelerator problem was not a mechanical failure, said Businessweek.
There were less than two dozen reported injuries.
Toyota has said it is happy about the decision.
"We felt we achieved our objective, to defend the safety of the product," said Toyota spokesman Mike Michels, reported USA Today.
"That having been done, the settlement is a business decision and we turn the page on a lot of this."
After falling sales after the recalls, BBC reported that Toyota is once again set to be the world's largest carmaker in 2012 after the figures come in.