Under the agreement, all patrol officers, supervisors and jail workers will be required to wear body cameras and microphones and cameras will be installed inside police squad cars.
The city agrees to change its municipal code that authorized jail for people who fail to pay fines.
The plan also includes more training of police officers and changes the city’s use of force protocol.
The Justice Department opened an investigation after the August 2014 shooting death of Michael Brown Junior by police officer Darren Wilson.
The Department determined last year that the Ferguson Police Department had demonstrated a “pattern and practice” of discrimination against African-Americans, targeting them disproportionately for traffic stops, use of force and jail sentences.