The fine is the largest in China's corporate history and will require the firm to lower royalty rates on patents used in China's mobile phone market.
The move could help Chinese smartphone makers Xiaomi and Huawei.
Qualcomm said on Monday it would not contest the ruling that it violated China's anti-monopoly law.
"Although Qualcomm is disappointed with the results of the investigation, it is pleased that the NDRC (National Development and Reform Commission) has reviewed and approved the company's rectification plan," the tech giant said in a statement on Monday.
The firm, which is the biggest supplier of chips used in smartphones, will now charge royalties based on 65% of the selling price of phones in China, instead of on the entire price.
China's expanding high-speed 4G network is driving demand in the world's largest smartphone market, where Qualcomm as a key player.
The chip giant made about half its global revenue of $26.5bn in China in its last fiscal year.
News of the agreement sent the company's New York listed shares up 2.8% in after-hours trading.
The firm also increased its profit and revenue forecast for the current fiscal year.
Chief executive Steve Mollenkopf said he was pleased the resolution had removed "uncertainty" surroundings its business in China.
"We will now focus our full attention and resources on supporting our customers and partners in China and pursuing the many opportunities ahead," he said.

Last month Harrington won the Cheltenham Gold Cup with Sizing John.
"These are all firsts for me - it's not bad for a 70-year-old," said Harrington, whose horse, ridden by Robbie Power, won at 9-2.
Gordon Elliott's Bless The Wings was runner-up for the second year in a row while Abolitionist took third.
The winner is owned by the Cooper Family Syndicate which comprises Sloane, Nigel and Billy Cooper, their sister Hazel and her husband.
"They bred him, they own him, they refused a lot of money for him this year and they are fantastic," said Harrington.
Thirteen of the 28 runners came from Ryanair boss Michael O'Leary's Gigginstown House stables, with the best-placed being the 2015 winner Thunder and Roses in fourth.
Despite running in his first handicap and for just the fourth time over fences, Our Duke never looked in any real danger and has now been cut from 25-1 to 14-1 for next year's Cheltenham Gold Cup.
"This means so much to me, it's my local racecourse and I was second in it a few years ago so this is nice compensation," said 35-year-old Power, who was on board Sizing John at Cheltenham and rode the 2007 Grand National winner Silver Birch.
"Once he got a good view of his fences and got plenty of light we were going to be happy.
"He just travelled so well everywhere, he is just a very good horse."
As well as three Cheltenham winners, Power also won four races at Aintree's Grand National meeting.

Cassells, 22, and Scrimgeour clocked six minutes and 29.63 seconds to finish ahead of Denmark and China.
The British duo won the title in the non-Olympic class in France last year.
Meanwhile Ireland's Olympic silver medallist Paul O'Donovan, 22, won his lightweight single sculls semi-final.
The Skibbereen man, who clinched Olympic silver in the lightweight double sculls in Rio with his brother Gary, produced a strong late burst to come from fourth at the halfway stage to win his semi-final in 6:51.71.
Slovenian Rajko Hrvat finished second in 6:52.31 with Germany's Konstantin Steinhuebel clinching the third qualifying spot for Saturday's final.
The Rotterdam championships features non-Olympic classes.
Irish duo Mark O'Donovan and Shane O'Driscoll will compete against Cassells and Scrimgeour in Saturday's lightweight pairs final after finishing second in their semi-final behind the French boat.
The British pair were the fastest qualifiers for final, ahead of the Danes (6:30.12) and France (6:30.56), while the Irish duo next quickest in 6:32.18.
After winning gold in their class at last year's World Championships in France, Cassells and Scrimgeour retained the European title in Brandenburg in May.
US chipmaker Qualcomm will pay $975m (£640m) to Chinese authorities to end a 14 month anti-trust investigation into its patent licensing practices.
[NEXT_CONCEPT]
Trainer Jessica Harrington celebrated her first success in the Irish Grand National when favourite Our Duke won Monday's big race at Fairyhouse.
[NEXT_CONCEPT]
Coleraine rower Joel Cassells and Great Britain team-mate Sam Scrimgeour remain on course to defend their lightweight pairs world title after winning their semi-final in Rotterdam on Thursday.