In a statement, the Environment Agency said the problem was caused by a failed underground valve that leaked into soil at Watson Fuels, otherwise known as WFL UK.
It said: “The issue was not immediately identified, as stock losses remained below the threshold for a full investigation.
“Although remedial action was taken once the leak was confirmed, heavy rainfall later caused the diesel to enter the river, resulting in harm to wildlife.”
The agency said WFL had agreed to pay £350,000 to Wessex Rivers Trust for environmental improvements.
Additionally, it will cover the Environment Agency’s costs of £87,869.95.
It said the sanction, known as an enforcement undertaking, avoided the cost of legal proceedings.
WFL has also spent £3.8m on measures to prevent future incidents, including a rebuild of the Nursling site, the agency added.
Agency spokesperson Dawn Theaker said: “This pollution incident was preventable and should not have happened.
“The funds will enable habitat improvement in the local area, benefiting the environment and communities in Southampton.”
