The deal will see Chevron, the second biggest oil company in the US, pay $25 million in profits and a $3 million civil penalty.
The company also will pay the treasury department's Office of Foreign Asset Controls $2 million.
Linda Chatman Thomsen, director of the SEC's division of enforcement, said in a release: "This is the commission's fifth action against a company for participating in the oil for food kickback scheme and demonstrates our continuing commitment to combating violations of the Foreign Corrupt Practices Act."
Chevron could not be reached immediately for comment.
The agreement was the result of a joint investigation by the US attorney's office and the Manhattan district attorney's office.
The Federal Bureau of Investigation (FBI), the New York Police Department (NYPD) and the department of the treasury's Office of Foreign Assets Control (OFAC), also took part in the probe.
The oil-for-food programme was established to help Saddam Hussein's Iraq sell oil to buy humanitarian supplies while it was under UN sanctions due to its 1990 invasion of Kuwait.
But a UN-commissioned inquiry headed by Paul Volcker, the former US Federal Reserve Chairman, found the programme to be corrupt after 2,200 companies in 66 countries paid $1.8 billion in kickbacks to Iraqi officials to win supply deals.