Costa, 31, appeared in court in Madrid in a mask on Thursday morning and pleaded guilty to evading almost £1m in taxes on his image rights.
He will pay the fine on top of the outstanding amount, which was collected in full by tax authorities last year.
In Spain, it is customary for a prison sentence to be replaced by an additional fine for terms under two years.
“Diego Costa reached an agreement a few months ago with the prosecutor and has already paid the corresponding fine plus interest and the request for a prison sentence was withdrawn,” an Atletico spokesman told Reuters on Wednesday. ”This week it is expected that an agreement will be ratified in court, as is mandatory.”
It is the latest high-profile case relating to footballers to have been taken to court in recent years, with Cristiano Ronaldo agreeing to pay almost £17m in fines and taxes in 2019 after being handed a 23-month sentence.
Lionel Messi, Luke Modric, Javier Mascherano and Marcelo have also all fallen foul of tax regulations.