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Malaysia and Goldman Sachs have signed an agreement to finalise the US firm’s $3.9 billion settlement relating to the 1MDB scandal.

Goldman Sachs, which had announced an agreement in principle on 24 July, confirmed the formal accord in a regulatory filing this week in New York, according to a report by the South China Morning Post. 

The firm must make a $2.5 billion cash payment to Malaysia within 10 days, the SCMP quoted unnamed sources as saying.

The deal announced in July called for Goldman Sachs to pay $2.5 billion while guaranteeing the return of $1.4 billion of 1MDB assets seized by authorities around the world, in exchange for Malaysia dropping charges against the bank.

The deal will help the bank move on from its worst scandal since the financial crisis, while Malaysia will recoup much of the $4.5 billion that prosecutors said were lost from 1MDB at a time when it is seeking funds for its massive stimulus package.

The saga has embroiled financial centres in Switzerland, the US, Singapore and Luxembourg. Some of its details have blurred fact and fiction: money extracted from 1MDB has been used to finance the Hollywood film, The Wolf of Wall Street – about a US fraudster.