Wal-Mart sells firearms in nearly every US state

The lawsuit alleged Wal-Mart committed thousands of gun sales violations in California between 2000 and 2003.

The total payment includes $5m in fines and more than $4m to fund state compliance checks with gun laws and prevent ammunition sales to minors.

Wal-Mart agreed to suspend firearms sales in its California stores in 2003,

'Lives at risk'

The alleged violations included the sale of guns to 23 people who were not allowed to possess them, and delivering 36 guns to customers who acquired them for people not allowed to own firearms.

Although Wal-Mart has suspended firearms sales in the state, California attorney general Bill Lockyer said he wanted to be sure the giant supermarket chain would follow state rules in future.

"Wal-Mart's failure to comply with gun safety laws put the lives of all Californians at risk by placing guns in the hands of criminals and other prohibited persons," said Mr Lockyer.

"Although Wal-Mart has suspended gun sales in California, this settlement will ensure that it follows state law if it renews sales and will also provide valuable public education about the importance of gun safety."

The world's largest retailer has not yet decided whether to resume firearms sales in California, company spokesman Gus Whitcomb said.