Under the settlement, filed in federal court on Thursday, the NYPD agreed to modify the Handschu guidelines so that they specifically prohibit investigations based on race, religion or ethnicity.
"This settlement is a win for all New Yorkers," said New York Civil Liberties Union Legal Director Arthur Eisenberg, as cited by the New York Daily News. "It will curtail practices that wrongly stigmatize individuals simply on the basis of their religion, race or ethnicity."
The settlement also requires that an independent monitor be appointed by City Hall to attend monthly internal meetings to review NYPD investigations. This monitor will have the authority to report any civil rights violations to the mayor or the court.
"We are committed to strengthening the relationship between our administration and communities of faith so that residents of every background feel respected and protected," Mayor Bill de Blasio said in a statement.
Law enforcement officials never admitted they illegally monitored Muslims, and said the settlement only formalizes what has already been in place.