In 2017, the UK's Information Commissioner's Office (ICO) commenced a formal investigation into the misuse of personal data in political campaigns.
The social networking giant had initially appealed the penalty. The ICO then pursued its own counter-appeal.
But finally, Facebook has agreed to pay the 500,000 pound fine but has made no admission of liability in relation to the fine.
"The ICO welcomes the agreement reached with Facebook for the withdrawal of their appeal against our Monetary Penalty Notice and agreement to pay the fine," said James Dipple-Johnstone, Deputy Commissioner of the ICO.
"The ICO's main concern was that UK citizen data was exposed to a serious risk of harm. Protection of personal information and personal privacy is of fundamental importance, not only for the rights of individuals, but also as we now know, for the preservation of a strong democracy."
"We are pleased to hear that Facebook has taken, and will continue to take, significant steps to comply with the fundamental principles of data protection," Dipple-Johnstone said.
Facebook said it wished it had "done more to investigate claims about Cambridge Analytica in 2015."
"We are pleased to have reached a settlement with the ICO," said Harry Kinmonth, Director and Associate General Counsel, Facebook.
( With inputs from IANS )