Repsol's Board of Directors voted Tuesday to approve an accord under which Argentina pledges to pay $5 billion in compensation for the nationalization of YPF, the Spanish oil major said.

To take effect, the pact, which was negotiated in November, must be ratified by the Argentine Congress and by Repsol shareholders at the annual general meeting, the firm said in a press release.

Repsol is to receive $5 billion in dollar-denominated Argentine government bonds as compensation for the 51 percent of YPF that Buenos Aires expropriated in May 2012.

"(T)he debt will not be considered to be extinguished until full payment, be it through the sale of bonds or through ordinary payment through the bonds' maturity," Repsol said Tuesday, emphasizing that the accord includes "guarantees for effective payment."

Both sides agree to terminate any pending judicial or arbitration processes and to waive future claims, according to the press release.

The Spanish giant will also enter into a parallel agreement with YPF and YPF Gas "by which all parties agree to desist from legal action," Repsol said.

The YPF expropriation sparked diplomatic tensions between Spain and Argentina, and Repsol vowed that it would seek at least $10.5 billion in compensation for its former unit. EFE