The firm was originally fined a record $5.2bn by the Nigerian Communications Commission (NCC) but the two sides have settled on a lower amount.
"This is the best outcome for the company," MTN executive chairman Phuthuma Nhleko said.
The fine was imposed amid fears that militants were using the phone lines.
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The NCC confirmed in a statement that payments would be made by instalments over the next three years.
South African mobile-phone giant MTN has agreed to pay $1.7bn (Â£1.1bn) to Nigeria over failing to disconnect unregistered Sim cards.