Google is set to pay nearly $US400 million ($597 million) to settle claims by 40 US states that it illegally tracked users' locations.

The investigation and settlement was led by Oregon and Nebraska, as state attorneys-general aggressively targeted the tech giant's user tracking. 

As well as paying $US391.5 million, Google must be more transparent with consumers about when location tracking is happening and give users detailed information about location-tracking data on a special web page, the Iowa attorney-general's office said.

"When consumers make the decision to not share location data on their devices, they should be able to trust that a company will no longer track their every move," Iowa Attorney-General Tom Miller said in a statement.

"This settlement makes it clear that companies must be transparent in how they track customers and abide by state and federal privacy laws."

Google says probe based on 'outdated policies' 

Google spokesperson Jose Castaneda said: "Consistent with improvements we've made in recent years, we have settled this investigation, which was based on outdated product policies that we changed years ago."

Google said in a blog post on Monday it would be "making updates in the coming months to provide even greater controls and transparency over location data".

They include making it easier to delete location data.

New users will have auto-delete controls which allow them to order Google to delete certain information when it hits a certain age.

The state attorneys opened a probe in 2018 after a report found Google recorded location data even when users instruct it not to.

It found Google had misled consumers about location tracking since at least 2014, in violation of state consumer protection laws.

Arizona filed a similar case against Google and settled it for $US85 million in October 2022.

Texas, Indiana, Washington State and the District of Columbia sued Google in January over what they called deceptive location-tracking practices that invaded users' privacy.

Google recorded $US111 billion in revenue from advertising in the first half of this year — more than any other seller of online ads.

A consumer's location is key to helping an advertiser cut through the digital clutter to make the ad more relevant and tailored to the individual. 

Reuters