The San Francisco Chronicle reports at the City Council approved the deal in closed session on Tuesday night.
It stems from allegations that men had their pants pulled down on city streets from 2002 to 2009. The allegations led to a series of lawsuits.
The Chronicle reports that the settlement will be distributed among 39 men.
Two other men who also claimed they were strip searched by Oakland police were awarded more than $200,000 in damages last year in their federal civil rights lawsuit against the city.