Tesla must hire an independent chair to oversee the company.
US securities regulators settled a lawsuit against Musk alleging that he made false and misleading statements about plans to take the company private in August.
An army of Tesla-owning volunteers swooped in over the weekend to help deliver cars to new buyers while Musk cheered on his employees, telling them in emails to "ignore all distractions" and that they were on the cusp of "an epic victory beyond all expectations".
The settlement comes just two days after the SEC sued Musk for fraud and sought to block the way of entrepreneur from running affairs of Tesla or any other publicly-traded company.
Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk's tweet. Tesla shares plummeted 14% on Friday, the biggest drop in nearly five years.More news: Magnitude Earthquake And Tsunami Rock Indonesia; At Least 380 Dead
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"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Steven Peikin, co-director of the SEC's Enforcement Division, said in the statement. The SEC said the company had no way to determine if his tweets contained information that must be disclosed in corporate filings, or if they contained complete and accurate information.
"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", said SEC enforcement division co-director Steven Peikin.
"The open board chairperson role creates an opportunity for Tesla to potentially put someone in place that is capable of influencing Musk and helping Tesla reach sustainability", Munster said.
Tesla shares took a steep dive last Friday, plunging 13.90% amidst news of the SEC's lawsuit against the outspoken CEO.
The Model 3 is seen by analysts as crucial to the carmaker's long-term prospects and Musk has promised the ramp-up will help make the company profitable in the third quarter.