The city has agreed to pay $2.75 million to 125 of its police officers over charges that the Police Department illegally planted a surveillance camera in officers' locker room in 1996.
In announcing the settlement, which will be paid partly by insurance, the city Tuesday said it was avoiding an expensive trial set to start this week.
"Ontario officials denounce what occurred 13 years ago and current city officials would not allow such behavior to be repeated," they said in a prepared statement.
The officers, represented by the American Civil Liberties Union, brought a class-action lawsuit against the city in 2004.
The settlement, approved by the City Council, will be divided among the officers.
The camera was installed during an internal investigation over the theft of a flashlight. It caught 125 officers wearing towels and underwear, though none were totally undressed. The camera was found in 2003 but it was too late to press criminal charges because the statute of limitations had expired.
Det. Scott Anderson, one of those involved in the suit, said in a statement that he was happy the issue was behind him, though he was disappointed that the case wouldn't be heard.