Oct 9 (Reuters) - Canada's TD Bank is expected

to pay about $3 billion in penalties as part of a settlement

with U.S. regulators and prosecutors over charges it failed to

properly monitor money laundering by drug cartels, the Wall

Street Journal reported.

The bank's U.S. unit is expected to plead guilty on Thursday

to the charges, the report said on Wednesday.

TD Bank did not immediately respond to a Reuters' request

for comment.

As part of the agreement, the bank's primary U.S. regulator,

the Office of the Comptroller of the Currency (OCC), is also

expected to impose an asset limit barring the Canadian lender

from growing above a certain level in the country, the newspaper

reported, citing people familiar with the matter.

Both the U.S. Department of Justice (DOJ) and the Treasury

Department's Financial Crimes Enforcement Network (FinCEN) are

planning to put independent monitors in place to watch the

lender closely and ensure compliance with the pacts, the report

said.

The FinCEN monitor is expected to be in place for four

years, the WSJ reported, citing one person familiar with the

matter.

The settlement will include the DOJ, the FinCEN, OCC and the

Federal Reserve among which the Justice Department will take the

biggest slice of the penalties amounting to about $1.8 billion

with the FinCEN getting $1.3 billion, the report said.

Spokespeople for the DOJ, the OCC and the FinCEN did not

respond immediately to Reuters' requests for comment.