By Julia Edwards

WASHINGTON (Reuters) - The Albuquerque, New Mexico, Police Department will undergo reform and be monitored for use of excessive force under an agreement announced on Friday between the city and the U.S. Justice Department.

The agreement follows a federal investigation that concluded the department used excessive, even deadly, force against passive civilians. People suffering from mental illness were disproportionately targeted, the investigation found.

Under the new rules, Albuquerque police will be prohibited from firing at moving vehicles, required to wear body cameras to record their encounters and limited in their use of electronic control weapons, such as tasers.

The Albuquerque City Council will consider the agreement next week and then it is expected to be filed in federal court to be approved as an order.

Vanita Gupta, the newly appointed acting assistant attorney general for the Civil Rights Division, announced the settlement in Albuquerque alongside the city's mayor and police chief, and Damon Martinez, U.S. attorney for the District of New Mexico.

Gupta's division also is handling a civil investigation into patterns and practices used by police in Ferguson, Missouri, where unarmed black teen Michael Brown was fatally shot by a police officer, triggering protests.

"Constitutional policing is key to building trust between police departments and the communities they serve, and trust is of course the key to ensuring public and officer safety," Gupta said in prepared remarks.

Martinez said hundreds of interviews were conducted with relatives of people killed in officer-involved-shootings, police officers and their families, and advocates for civil rights, mental health, the homeless and immigrants.

The settlement heralded the start of a new chapter for policing in New Mexico's largest city, he said.

Martinez thanked rank-and-file officers for their professionalism. They do not fear greater accountability for using force, he said, but they do worry about perceptions the disciplinary system is inconsistent and arbitrary.

The Justice Department inquiry, which was prompted by public complaints, concluded that a majority of 20 fatal officer-involved-shootings from 2009 to 2012 were unconstitutional. In one high profile case, a U.S. veteran of the Iraq war suffering from post-traumatic stress disorder was killed in an incident that led to a $10 million civil judgment against the city.

(Reporting By Julia Edwards; Additional reporting by Joseph Kolb in Albuquerque; Editing by Andrew Hay, Daniel Wallis and Bill Trott)