Leading car manufacturer Toyota Motor Corp has reached an agreement worth more than $1 billion to settle a lawsuit involving unintended acceleration in some of its vehicles as the company recalled 7.43 million vehicles worldwide to fix the problem.

In a statement on Wednesday, Toyota had said it would take a one-time, $1.1 billion pre-tax charge against earnings to "cover the estimated costs of the economic loss settlement and possible resolution costs of civil litigation brought in California by the District Attorney of Orange County and an investigation by a multi-state group of Attorneys General stemming from previous recalls."

It comes after Toyota has paid nearly $70 million in US fines after the National Highway Traffic Safety Administration had failed to recall millions of vehicles in a timely fashion.

Under the proposed settlement, Toyota will offer special vehicle coverage for up to 150,000 miles on 16.3 million vehicles and will retrofit as many as 2.7 million vehicles with brake override systems, the statement said.