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By Laura Myers | May 7, 2011 6:09 PM EDT

City officials on Friday agreed to pay $1.5 million to the family of a Native American woodcarver fatally shot by a white cop in a confrontation that stoked racial tensions and helped spark a federal probe of Seattle's police force.

A police firearms review board deemed the August 2010 shooting of John Williams, 50, unjustified, ruling that although he was intoxicated at the time he posed no threat "of serious harm" to the officer.

But prosecutors chose not to bring criminal charges against the policeman, Ian Birk, 27, finding insufficient evidence of the criminal intent or malice required under Washington state law to prosecute a law enforcement officer for homicide.

Birk quit the force the same day, February 17.

The civil settlement, announced by the Seattle city attorney's office, was reached through mediation by municipal officials and Williams' relatives.

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The settlement document states that $1.25 million will be paid to Williams' estate and $250,000 paid to his mother, Ida Edward of Vancouver, British Columbia.

Birk had insisted he believed Williams was armed and that he shot the man in self-defense. A knife with the blade folded closed was found next to Williams after the shooting.

His death sparked several rallies, attended mostly by minority citizens, protesting policing practices they claimed were racially discriminatory.

The Williams shooting was one of several incidents cited by the American Civil Liberties Union in seeking a U.S. Justice Department investigation into an alleged pattern of excessive force by Seattle police officers, particularly against ethnic and racial minorities. The Justice Department in March said it had launched such an investigation.

Williams' family on March 16 asked the King County Superior Court to convene a citizens grand jury to determine whether Birk should be criminally charged. No ruling has been made.

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