The settlement will be accompanied by reforms of the Louisville Metro Police Department, including a requirement that commanders approve search warrants before they are put to a judge, Fischer said at a news conference.

"I'm deeply, deeply sorry for Breonna's death," Fischer, who is white, told reporters.

"My administration is not waiting to move ahead with needed reforms to prevent a tragedy like this from ever happening again."

Fischer was joined by Taylor's family, who said they welcomed the settlement but also demanded officers involved face criminal charges.

"As significant as today is, it is only the beginning of getting full justice for Breonna," said Tamika Palmer, Taylor's mother, her voice at times shaking with emotion.

"It's time to move forward with the criminal charges because she deserves that and much more."

Taylor's death, alongside that of George Floyd, a black man killed in May by a white Minneapolis police officer who knelt on his neck, gave rise to one of the largest protest movements in US history, with daily demonstrations in cities ever since.

The settlement appeared to be one of the largest ever after a police killing in the United States, Benjamin Crump, a lawyer for the family, told reporters.

As part of Tuesday's settlement, Mayor Fischer said Louisville police officers will be offered housing credits to move to some of the poorest parts of the city in the hopes of improving community ties.

They will also be encouraged to regularly volunteer for community organisations and will face increased random testing for drug use.

Taylor, a 26-year-old emergency medical technician, was killed on March 13 when Louisville police forced their way into her apartment shortly after midnight using a so-called "no-knock" arrest warrant that did not require them to announce themselves.

Louisville police obtained the warrant from a judge as part of an investigation into a drug ring at another house elsewhere in the city.

They told the judge that they believed that one of the men suspected of selling drugs had used Taylor's apartment to receive packages.

Taylor had previously dated the suspected drug seller but had severed ties with him, according to her family.

In June, the police department fired one of the three officers involved, detective Brett Hankison, who is white, for displaying "extreme indifference to the value of human life" when he fired ten bullets into Taylor's apartment.

The two other officers have been reassigned to administrative duties.

The city also banned the use of no-knock warrants.

None of the three officers has been criminally charged but the Kentucky Attorney General Daniel Cameron, a black Republican, is expected to bring the case before a grand jury this week, according to local media reports.

Australian Associated Press