Benetton has been forced to apologise over its hugely controversial "death row" adverts and make a substantial charitable donation after the US government accused the Italian fashion company of misleading officials to gain access to inmates.
The state of Missouri filed a lawsuit last year against Benetton over the campaign, which featured prison inmates on death row in the US.
The lawsuit alleged that Benetton made false claims to state officials in gaining access to the prison and misrepresented the purpose of the interview.
The case has now been settled, with the announcement that Benetton will send letters of apology to the families of murder victims whose attackers were pictured in an advertising campaign.
The letters will express the company's regret for any pain caused by the controversial "We on death row" project.
"This is an appropriate resolution to a situation that caused renewed emotional pain for those who lost their loved ones to these four murderers," said the Missouri attorney general ,Jay Nixon.
Benetton also will donate $50,000 to the Missouri Crime Victims Compensation Fund as part of the agreement.
The company must also immediately stop using the four inmates in the campaign on its website.
The "We on Death Row" project resulted in a 96-page magazine supplement published in 2000 and a photo feature on the company's website.
One of the four Missouri inmates who murdered a Missouri policeman is due to be executed on July 11.
Benetton is reknown for its provocative ads. The company has used images including a dead Croatian soldier's bloodstained clothes and a bloody, newborn baby to sell its pastel-coloured jumpers.
But the photographer behind Benetton's advertising for years, Olivero Toscani, left the company following the backlash over using pictures of death row inmates.
At the time of the death row campaign, the company said the photographs "aim at giving back a human face to the prisoners on death row".
Most US states condemned the campaign while retail chains Sears and Roebuck & Co refused to sell Benetton products following protests from victims rights groups and threats of a boycott.