The family of murdered Australian life coach and yoga instructor Justine Ruszczyk Damond will receive a record $US20m ($A29 million) in a settlement from the city of Minneapolis.

The family’s lawyer said Damond’s father, John Ruszczyk, and brother Jason were satisfied with the payment because it would be “transformational” in forcing change to policing in the US city.

Damond, 40, formerly of Freshwater in northern Sydney, was shot dead by Minneapolis police officer Mohamed Noor on 15 July, 2017 after calling 911 to report a possible rape in her neighbourhood.

A jury found Noor guilty of Damond’s third-degree murder on Tuesday after just a day of deliberations.

“Quiet satisfaction,” the family’s Minneapolis lawyer Bob Bennett said in describing the Ruszczyks’ reaction to the settlement.

“I think they achieved the goals of both getting an amount that is undeniably significant and undeniably transformational.”

The settlement calls for the Ruszczyks to donate $US2m to a Minneapolis foundation aimed at addressing gun violence.

The family had originally sued the city for $US50m.

“This is not a victory for anyone but rather a way for our city to move forward,” Minneapolis mayor Jacob Frey said on Friday.

“We know that no amount of money can heal the pain of the Ruszczyk family, or any family that has lost a loved one in this way,” said the city council president Lisa Bender. “It is our continued commitment to work together with our community to demand and support change to our policing.”

The $US20m figure is significantly higher than the previous record of $US4.5m paid out for a Minneapolis police officer shot by another officer, who mistook him for a fleeing suspect.

Bennett denied that Damond’s family had received such a large payment because she was white when other police shooting victims who were minorities received less.

“I think the actions of Mohamed Noor were the things that were terrible and wrongful and unconstitutional and criminal,” he said.

“I think Justine Ruszczyk was a wonderful human being and she portrayed what really is good about our society – that we help one another, that we love one another.

“That is what I think caused this case to be as big and meaningful and transformational as it is.”

The Ruszczyks spent a hellish three weeks at Noor’s trial where graphic testimony, autopsy photos and police body camera video of Damond’s last moments were shown.

Bennett pointed to Noor’s testimony at the end of the trial where he said he made a split-second decision to shoot Damond when she appeared at the open window of his stationary police vehicle.

Noor said that from the front passenger seat in his squad car, he thought he was being ambushed and shot across his police partner, Matthew Harrity, who was driving.

Noor’s bullet went out through Harrity’s window and fatally struck Damond in the stomach.

“His testimony didn’t provide a defence,” Bennett said. “He didn’t see a threat. He called it a threat but that is not enough to call it a threat.

“In fact, the jury winced every time he did.”

Damond had moved to Minneapolis to be with her fiance, Don Damond, and she died just weeks before the couple was due to get married in Hawaii.