(File Photo: IC)

It's reported the US government has struck a new deal with Chinese telecom giant ZTE, resolving a controversy that had put the Chinese cellphone maker in peril.

The deal requires ZTE to pay an additional 1 billion US dollar penalty and put another 400 million in escrow to cover possible future violations.

These penalties come on top of the millions it has already paid to the US under a 2017 settlement.

The company is also required to change its entire board of directors and hire outside legal compliance specialists who will report to the US Commerce Department for 10 years.

In return, Washington will strike the company from its sanctions list.

In April, Washington banned the sale of crucial US components to the company over allegations that it had repeatedly lied and failed to take action against workers responsible for the sanctions violations.