The Information Commissioner's Office (ICO) said in a statement on Friday that it required Google to sign a "formal undertaking" that it would make the changes by June 30 and take further steps in the next two years.
As a result, Google will not be fined by the United Kingdom for its actions, in contrast to France and Spain where regulators imposed penalties in addition to asking for changes.
The company welcomed the regulator's decision, saying it had agreed improvements to its privacy policy.
"We're pleased that the ICO has decided to close its investigation," a Google spokesman said.
The tussle between Google and Europe's data protection regulators began after the company took a new approach in March 2012 to consolidate some 70 existing privacy policies into one.
It also began to pool data collected on individual users across its services, including YouTube, Gmail and its social network Google+, giving users no way to opt out.
Data protection regulators from 28 European countries, known as the Article 29 group, soon found that the approach did not comply with EU rules and gave Google a deadline to change it or face sanctions. That touched off a long period of back and forth between the company and the various national regulators.