The US justice department says it will not prosecute the police officer who shot and killed unarmed black teenager Michael Brown in Ferguson, Missouri last August, prompting nationwide outrage.

Its decision not to prosecute Darren Wilson on federal civil rights charges was issued alongside a report that faulted the police department in the St Louis suburb for systematically targeting African-Americans.

"Because Wilson did not act with the requisite criminal intent, it cannot be proven beyond reasonable doubt to a jury that he violated (Brown's civil rights) when he fired his weapon at Brown," it said.

"For the reasons set forth above, this matter lacks prosecutive merit and should be closed."

Brown's parents said they are saddened by the justice department decision.

US attorney general Eric Holder called on leaders of Ferguson to take "immediate, wholesale and structural corrective action" on the problems with the city's police that the Justice Department unearthed while investigating the shooting.

Mr Holder said the department would continue to work on reducing and eliminating racial bias within Ferguson's police force and elsewhere.

"Let me be clear: the United States department of justice reserves all its rights and abilities to force compliance and implement basic change," Mr Holder said in a speech about the department's findings of systemic racial bias and unconstitutional policing in the Midwestern town.

Mr Holder said the investigation revealed problems with policing across the country.

"In the days ahead, the department of justice will stay true to my promise, vigilant in its execution, and determined in the pursuit of justice - in every case, in every circumstance, and in every community across the United States," he said.

The shooting and a grand jury's decision in November last year not to charge Mr Wilson sparked violent protests in Ferguson, where most residents are black but almost all the political leaders and police are white.

Mr Wilson told the grand jury that he shot Brown - the suspect in the theft of a box of cigarillos from a corner shop - in self-defence.

Others contend that Brown had his hands up in the air when the officer, who is no longer with the Ferguson police department, opened fire with a handgun.

The city, home to about 21,000 people, became the focal point of a national debate on race relations after the August 9 incident.

Sympathy protests were staged in scores of other cities.

The family of the dead teenager condemned the November grand jury decision to drop charges against Mr Wilson.

The family's lawyer said that verdict was unfair.

The United Nations human rights high commissioner, Zeid Ra'ad Al Hussein expressed concern at the time, saying US authorities needed to tackle a "deep and festering" mistrust in some sectors of the population and examine how race relations affect law enforcement.

AFP/Reuters