J.P. Morgan ( JPM - Get Report) will pay Enron $350 million to drop objections to as much as $650 million of claims in Enron's bankruptcy to settle allegations J.P. Morgan helped facilitate the energy trader's storied collapse in 2001.

The New York bank said it doesn't expect the deal to have a material effect on its earnings. Tuesday's settlement comes two months after J.P. Morgan agreed to a $2.2 billion settlement of a class-action lawsuit by shareholders who lost money on their Enron investments.

"With today's agreement, we have put behind us another significant piece of our Enron exposure," the bank said in a release. "We are intensely focused on executing our merger, serving our clients and building a great company." J.P. Morgan acquired Bank One last year.

The terms of Tuesday's deal call for J.P. Morgan to pay $350 million to the bankrupt estate of Enron and give up certain contested claims it has filed in the bankruptcy. Enron agreed to allow other claims in the bankruptcy proceeding and will dismiss or release all claims it has against J.P. Morgan.

If J.P. Morgan later decides it wants to retain more of its claims in the bankruptcy litigation, it can do so by raising the size of Tuesday's cash payment.

"Today's settlement is a tremendous financial outcome for the Enron estate," said Stephen Cooper, Enron's interim CEO and chief restructuring officer. "We are encouraged by the momentum of the recent MegaClaims settlements and look forward to working with the remaining financial institutions to get these issues behind us."

In a separate release, Toronto-Dominion Bank's ( TD - Get Report) TD Bank Financial said it will pay $50 million to cover similar claims.