Wegelin, the oldest Swiss private bank, has pleaded guilty to a criminal charge of conspiracy for helping wealthy Americans to evade taxes on at least $1.2bn (£743m) hidden in offshore bank accounts.
The plea came at a hearing before Judge Jed Rakoff in US district court in Manhattan, Reuters reported. Wegelin was the first foreign bank to be indicted by US authorities in recent history. The indictment, announced last February, shook the storied world of Swiss banking.
"Wegelin was aware that this conduct was wrong," Otto Bruderer, a managing partner at Wegelin, said at the hearing.
Under a plea agreement, Wegelin agreed to pay $57.8m, which includes of $20m in restitution to the Internal Revenue Service and a civil forfeiture of $15.8m, the US Justice Department said.
It also agreed to a $22.05m fine, the Justice Department said. Rakoff, who must approve the fine, said stipulated guidelines placed the fine at $14.7m to $29.4m. Sentencing was set for March 4.
Wegelin in a statement said it had set aside money to pay the fine, restitution and forfeiture.
"Once the matter is finally concluded, Wegelin will cease to operate as a bank," Wegelin said.
The case has signalled a ramping up of pressure on nearly a dozen other Swiss and Swiss-style banks under criminal investigation by the Justice Department.
Because Wegelin has no branches outside Switzerland, it used UBS for correspondent banking services, a standard industry practice, to handle money for US-based clients.
Wegelin, founded in 1741, effectively broke itself up following the indictment by selling the non-US portion of its business.