GlaxoSmithKline said on Thursday it had agreed to settle its most significant disputes with the U.S. government over the way it marketed and developed drugs at a cost of $3 billion (1 billion pounds), which is covered by existing provisions.

The final settlement, covering both civil and criminal claims, is expected to be finalised in 2012. It includes a Department of Justice investigation into the company's controversial diabetes drug Avandia, which has been linked to heart risks.

(Reporting by Ben Hirschler)