Two black men who were arrested in Starbucks while they were waiting for a friend have settled with the city of Philadelphia for $1 each.

But, in addition to the symbolic payment, the city will also be donating $200,000 to a programme dedicated to supporting young entrepreneurs.

“I am pleased to have resolved the potential claims against the city in this productive manner,” Mayor Jim Kenney told the Associated Press. “This was an incident that evoked a lot of pain in our city and put us under a national spotlight for unwanted reasons.”

The arrest of Rashon Nelson and Donte Robinson on April 12 sparked outcry when the pair were led out of a Starbucks coffee shop in handcuffs after a manager called the police.

Captured on video, the police were called to the scene after a manager told Nelson and Robinson to leave because they had not ordered anything while they waited for a business associate to join them.

Starbucks staff call police to arrest two black men 'who didn't order anything'

The viral video prompted a personal apology from the Starbucks CEO, Kevin Johnson, who told Good Morning America: “The circumstances surrounding the incident and the outcome in our store on Thursday were reprehensible, they were wrong.

“And for that, I personally apologise to the two gentlemen who visited our store.”

Starbucks has also announced it reached a separate settlement with the two men but did not elaborate on whether they would also donate to the entrepreneurship programme.

According to Mayor Kenney, Nelson and Robinson wanted to “make something positive come of this”.