The company is to post summaries of all its studies since December 2000 in a clinical trial registry on its website. The company has also agreed to pay the State of New York $2.5 million (€2.07 million) to settle the charges.
The lawsuit alleged GSK misled the public about the use of Paxil in children, suppressing the results of at least four different studies, which showed the drug Paxil, could have increased suicidal behaviour among users. The suit claimed GSK had disclosed only the study with the most favourable results.
At the same time GSK was said to have been heavily promoting the drug to US doctors, highlighting its efficacy and safety.
In a statement, GSK said it still believed the allegations Spitzer's civil charge of fraud was unfounded but settled to avoid the cost of litigation.
In June, immediately after the lawsuit was filed, Glaxo made the Paxil trial data in question, available on the website. The information also had been distributed on posters and in letters to healthcare professionals and during meetings.
Spitzer said the settlement set a new standard for the pharmaceutical industry.
"This settlement holds GSK to a new standard of disclosure about studies concerning its drugs, a standard that helps to ensure that doctors and patients have access to all scientifically sound information so doctors can prescribe appropriate medication for their patients," he said.
He added that Glaxo's action would encourage others companies to follow suit, in part because investors and funders of research would be drawn to a firm that is a leader in disclosure of product data.
Currently, the only antidepressant prescribed to children in Britain without a warning is Prozac, although studies suggest it has low success rates. Paxil was banned for use by children and adolescents in Britain last June.
In 2002, more than 2m prescriptions for Paxil were written for American children and adolescents to treat mood disorders and depression. That translated into $55m in sales.