A federal judge on Tuesday approved a settlement in the lawsuit brought by the family of Michael Brown against the police officer who fatally shot him in Ferguson, Mo., ending the legal chapter of a case that sparked national outrage over the police’s treatment of black people.

Mr. Brown, who was 18 and black, was unarmed when he was shot three years ago by Officer Darren Wilson, who said that Mr. Brown had attacked him and charged toward him when he fired the fatal shots. Some witnesses said that Mr. Brown had his hands up, but both federal and state prosecutors questioned that narrative and determined that there was not enough evidence to charge Mr. Wilson, who is white, criminally.

Judge E. Richard Webber of the Eastern District of Missouri sealed the details of the settlement, which also named the city of Ferguson and the former police chief, Thomas Jackson. The amount would be less than $3 million, according to a person familiar with the details of the case, who spoke on condition of anonymity because no one is alllowed to speak about the particulars of the case. Three million dollars is the most the city can pay under its insurance, according to The St. Louis Post-Dispatch.

The lawsuit was filed by Mr. Brown’s father, Michael Sr., and his mother, Lesley McSpadden.

“I hope that this gives the family some closure and I hope they feel like this gives them a little bit of justice,” said Emily Davis, a Ferguson resident who has advocated police reform. “But I do not feel like the community has justice yet. People’s experiences with the police and the court system are not changing quickly. The city is still not changing openly and willingly.”

Lawyers for Mr. Brown’s parents declined to comment on the settlement. A phone message left with the city’s media line on Tuesday evening was not immediately returned.

Mr. Brown’s killing sparked months of protests and occasional rioting, with many people saying that the case represented over aggressive policing of black communities. Mr. Wilson, who has since left the Ferguson police force, had stopped Mr. Brown and a friend who had been walking in the middle of a residential street in the suburb north of St. Louis on Aug. 9, 2014. That led to a physical confrontation at Mr. Wilson’s police cruiser, which eventually led to a foot chase and the shooting.

The lawsuit argued that Mr. Wilson was aggressive and profane in stopping Mr. Brown and a friend, and that he fired a shot at Mr. Brown as he ran away. Mr. Brown’s parents also cited what they say Mr. Wilson told his supervisor at the scene — that Mr. Brown had put his hands up.

Although Mr. Wilson was never criminally charged, the Justice Department investigated the city’s law enforcement system and issued an excoriating report that found that the police and the courts routinely violated people’s rights. Black people were disproportionately affected by the police’s practices, which included using petty violations and regular traffic stops to pad the city’s coffers.

The fallout from the shooting included the resignations of the city’s police chief, manager and judge. But voters this spring re-elected their incumbent mayor to another term.

The city entered into an agreement with the Justice Department to reform its law enforcement system, including new police training, civilian review and changing a system that locked up people who could not afford to pay fines.

“I would say we’re moving in that direction,” Tony Rice, a Ferguson resident and activist said of reforming the system. “But it’s moving pretty slow.”