Caballé, 81, will pay a €250,000 ($305,000) fine and has accepted a six-month prison sentence which she will not serve, Spain's 20 minutos newspaper reported on Tuesday.
Lawyers for the Barcelona-born singer had been negotiating with Spain’s office for economic crimes and the country’s tax agency, who had called for the singer to serve a prison sentence as well as paying the fine and interest.
The singer did not declare her earnings in 2010, listing her official residence as being in the tiny country of Andorra, in the Pyrenees "for the sole purpose of not paying her taxes". according to the prosecution.
She avoided paying a total of €500,000 but has since paid back that sum in two instalments.
Caballé’s deal with the tax office means she will not suffer the same fate as fellow Spanish singer Isabel Pantoja, who began her two-year prison sentence for money laundering in November after a series of last ditch appeals proved fruitless.