Kirsty Powell was stopped by police officers with her husband in 2015 as he was driving a lowrider vehicle.
The Council on American-Islamic Relations, (CAIR) which announced the settlement on Thursday, had sued the city of Long Beach on behalf of Kirsty Powell, an African-American Muslim, "after police officers forcibly removed her hijab in view of other male officers and dozens of inmates".
After Powell's suit was filed, a police spokesperson confirmed that "during the booking process Powell's hijab was removed and placed into her property bag where it was secured".
Powell's husband requested a female officer handle the arrest, but the arresting officers denied the request and told Powell that she had to remove her hijab. Powell filed a lawsuit against the police department in 2016, claiming that she had been compelled to remove her headscarf, which was a violation of her First Amendment rights.
Powell spent the night in prison without her headscarf. They didn't return it until she was bailed out of jail the next day.
A California city has agreed to pay $85,000 (72,000 euros) to settle a lawsuit filed by a Muslim woman whose hijab was forcibly removed by the police.
'She cried throughout the ordeal and experienced humiliation when both her religious beliefs and personal integrity were violated, ' Powell's lawsuit says.
CNN's calls to the Long Beach City Attorney's Office were not returned.
In late 2016, following Powell's lawsuit, the LBPD changed their policy to allow religiously observant arrestees to retain their head coverings, as long as authorities don't believe those garments pose a safety risk for the person.
Speaking to the Council, Powell said she hoped she would be the last Muslim woman to go through such an experience.
"I want my Muslim sisters to always feel comfortable and safe wearing a hijab and to stand up for what's right", she said.