In this July 3, 2015 photo, the 1 Malaysia Development Berhad (1MDB) logo is seen on a billboard at the funds flagship Tun Razak Exchange under-development site in Kuala Lumpur. (MANAN VATSYAYANA / AFP)

Goldman Sachs Group Inc and Malaysia have signed an agreement to finalize the US$3.9 billion settlement over the 1MDB scandal, according to people familiar with the matter.

The deal involved Goldman Sachs agreeing to pay US$2.5 billion in cash and guaranteeing the return of US$1.4 billion of 1MDB assets seized by authorities around the world, in exchange for Malaysia dropping charges against the bank

The US bank formalized the deal on Tuesday and must make a US$2.5 billion cash payment to Malaysia within 10 days, said the people, who asked not to be identified as the information is private.

ALSO READ: Verdict in first 1MDB case packs risk for Malaysian government

The pact reached in July was a major step toward resolving the scandal surrounding 1MDB, a Malaysian state fund that’s at the center of global investigations into corruption and money-laundering. 

It involved Goldman Sachs agreeing to pay US$2.5 billion in cash and guaranteeing the return of US$1.4 billion of 1MDB assets seized by authorities around the world, in exchange for Malaysia dropping charges against the bank.

ALSO READ: Goldman, Malaysia reach US$3.9b settlement over 1MDB

A representative for Goldman Sachs declined to comment. A representative for Malaysia’s finance ministry couldn’t immediately comment.

The deal allowed the bank to move on from its worst scandal since the financial crisis, while the country gets to recoup much of the US$4.5 billion that prosecutors said were lost from 1MDB at a time when it’s seeking funds for its massive stimulus package.

Goldman Sachs is set to face a case management hearing over its criminal charges at a Malaysian court on Sept 4, a date that was set before the deal was struck.

READ MORE: Malaysian court grants temporary freeze on US$340m 1MDB money