The French bank is also paying $8.9 billion to federal and state authorities and agreed to terminate some senior executives, the New York State Department of Financial Services said in a statement.
The temporary dollar-clearing ban is due to start on Jan. 1, 2015, and is an unprecedented punishment. It's unclear if the French bank will lose a significant number of clients due to the ban. The ban largely impacts BNP's oil and gas finance business.
The state regulator also said 13 individuals will leave the bank as part of the settlement, including chief operating officer Georges Chodron de Courcel.
(Reporting by Karey Van Hall; Editing by Sandra Maler)