By Karen Freifeld

NEW YORK, Sept 21 (Reuters) - Standard Chartered Bank signed a final agreement with New York's banking regulator to pay $340 million to settle allegations that it hid transactions with Iran from regulators.

The London-based bank agreed in principle to pay the civil penalty last month after its stock dropped amid the allegations and a threat to revoke the bank's license to do business in New York.

The parties agreed the conduct at issue involved transactions of about $250 billion, Benjamin Lawsky, superintendent of the New York state Department of Financial Services, said in announcing the formal agreement.

A criminal investigation into Standard Chartered's practices is close to being completed and a joint settlement with other New York and U.S. authorities will probably be completed in the next couple of weeks, according to a person familiar with the probe.

"We are pleased to have reached a final settlement with the Department of Financial Services, and we look forward to resolving all outstanding issues with other U.S. authorities related to our past sanctions compliance," said Julie Gibson, a spokeswoman for Standard Chartered in New York.

The bank's negotiations with the Manhattan District Attorney, the U.S. Treasury Department, Justice Department and the New York Federal Reserve are "ongoing," Gibson said.

The bank could not predict when discussions with other U.S. agencies would be completed, or the outcome, and therefore "potential liabilities cannot be reasonably quantified," it added in a statement.

Lawsky's move against Standard Chartered last month angered other U.S. regulators who had spent more than two years investigating the bank. The other regulators sought a single, global settlement, according to people close to the matter.

According to the consent order signed Friday, New York's Department of Financial Services found the bank provided U.S. dollar clearing services to Iranian customers from at least 2001 through 2007.

In processing transactions, the bank stripped or left out Iranian information from U.S. dollar wire payment information, the agreement said.

The practice prevented regulators from "identifying suspicious patterns of activity" which could assist law enforcement authorities, the regulator found.

In addition to the $340 million payment, Standard Chartered agreed to install an outside monitor for two years and to hire an anti-money laundering auditor in its New York branch.

The other U.S. authorities negotiating with Standard Chartered either did not immediately respond to requests for comment or declined to comment.

(Additional reporting by Steve Slater)

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