Google has reached an agreement with a German regulator over the way it collects and utilises user information for its Analytics websites traffic monitoring tool in Europe, Bloomberg reports.

Google has agreed to expand a browser add-on that will allow users to opt-out of website data collection, allowing website owners to request that the search giant does not store their complete IP addresses within Europe. To adhere to German law, the company will also sign data-administration contracts with website owners.

The issue was first raised by German state privacy regulators in 2009, voicing concerns over how Google collected information via its Analytics tool, and asked regulator Johannes Caspar to negotiate with Google on their behalf.

The search giant has said that whilst it disagrees with regulators that believe its Analytics tool violate data-protection rules, it will work with German authorities to work through their concerns and implement necessary changes.