Chicago police showed racial bias and a "pattern" of excessive use of force, the US Justice Department has found.
A scathing report was released on Friday after a year-long probe into the police force found serious civil rights abuses.
The 2015 inquiry was launched after fallout over the release of dashcam video showing a white officer shooting black teenager Laquan McDonald.
The city agreed to enter negotiations on a consent decree to guide reform.
US Attorney General Loretta Lynch announced Chicago would work with the Department of Justice on a consent decree, which would commit the city to sweeping reforms within the police department to restore public trust.
The 13-month investigation found improper training as one of the main causes of civil rights violations.
It also concluded the city lacked community policing and failed to provide officers with the support they need.
"The resulting deficit in trust and accountability is not just bad for residents - it's also bad for dedicated police officers trying to do their jobs safely and effectively," US Attorney General Loretta Lynch said at a news conference.
She added the report laid "the groundwork for the difficult but necessary work of building a stronger, safer and more united Chicago for all who call it home".
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