The firm must make it easier for users to find out how their data is collected and what it is used for and submit to a two-year review.
The deal follows an investigation by the regulator. Similar reviews are continuing elsewhere in Europe.
It is understood that Google will seek to strike a similar deal with other European regulators.
The Information Commissioner’s Office (ICO) found that Google was “too vague when describing how it uses personal data gathered from its web services and products”.
It was joined by other data regulators, which form the European Article 29 Data Protection Working Party.
It will also provide “unambiguous and comprehensive information regarding data processing, including an exhaustive list of the types of data processed by Google and the purposes for which data is processed”.