Attorneys for Noel Polanco's family are scheduled to discuss the agreement Wednesday afternoon.
Polanco was shot during a 2012 traffic stop by emergency service unit detective Hassan Hamdy through an open passenger window because he believed Polanco was reaching under the seat.
The city will pay his mother $2.5 million.
The family's lawyer, Sanford Rubenstein, said in a statement "This is a fair settlement for damages for the wrongful death of a fine young soldier who should not have died the way he did."
A grand jury cleared Hamdy of criminal wrongdoing. The Brooklyn U.S. attorney's office also reviewed the incident and concluded the detective did not intentionally violate the victim's civil rights.