WASHINGTON (Reuters) -The U.S. Justice Department said on Friday it has struck a deal in principle with Boeing to allow it to avoid prosecution in a fraud case stemming from two fatal 737 MAX plane crashes that killed 346 people.

The agreement allows Boeing to avoid being branded a convicted felon and is a blow to families who lost relatives in the crashes and had pressed prosecutors to take the U.S. planemaker to trial.

Boeing has agreed to pay an additional $444.5 million into a crash victims' fund that would be divided evenly per crash victim on top of an additional $243.6 million fine.

The Justice Department expects to file the written agreement with Boeing by the end of next week.

(Reporting by David Shepardson; Editing by Chris Reese)

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