MILAN (Reuters) - Stellantis ( STLA ) and Ferrari Chairman John Elkann has agreed to do a year of community service and pay a negotiated sum to settle a tax dispute over the inheritance of his grandmother, Italian prosecutors said on Monday.

Elkann and his siblings Lapo and Ginevra will jointly pay 183 million euros ($214.99 million) to the tax authorities related to the inheritance of their grandmother Marella Caracciolo, the prosecutors in the northern city of Turin said.

Elkann also plea bargained for a year of community service, thus ending a criminal investigation against him for alleged tax fraud in relation to the inheritance.

Prosecutors said they had given their approval to the bargain, which must now be ratified by a judge.

In Italy, a plea bargain does not imply an admission of guilt.

The prosecutors asked the judge to drop the criminal case against Elkann's siblings Lapo and Ginevra.

A spokesperson for the three siblings said in July that a tax settlement had been reached with the tax revenue agency, without providing the figure of the agreement.

The payment of the 183 million euros closes all investigations into evasion of taxes on an estate estimated by the Italian authorities to be worth around 800 million euros.

Elkann will now have to propose to the judicial authorities an institution where he can perform his community service.

This could be a centre for the elderly, an association that helps drug addicts, or some other institution with a similar social-support function.

The case stems from a wider inheritance dispute between the Elkanns and their mother Margherita over the estate of Gianni Agnelli, the celebrated former Fiat boss, which has divided one of Italy's best known business dynasties.

Gianni, a symbol of Italy's post-war economic boom, died two decades ago.

As part of this case, a judge in Turin last year seized money and assets worth almost 75 million euros from five people, including John, Lapo and Ginevra Elkann.

In addition to the tax and criminal proceedings, a civil case concerning the inheritance dispute is also ongoing.

It pits Gianni's daughter Margherita, who inherited 1.2 billion euros, against three of her eight children including her eldest, John Elkann.

Margherita is fighting to overturn agreements she signed in 2004 after her father's death, in an attempt to ensure that money goes to her five children from a second marriage.

($1 = 0.8512 euros)