The operators of the Artemis brothel had launched two lawsuits after police raided the premises in 2016. The city administration has apologized for detaining staff and making prejudicial statements at a press conference.
The city of Berlin has issued an apology to a major brothel and paid €250,000 ($269,000) in compensation over a police raid that happened seven years ago.
Hundreds of police raided the Artemis sauna and brothel near Westkreuz in 2016, detaining several people on suspicion of human trafficking, tax evasion and other violations.
At a press conference afterward, public prosecutors made references to organized crime, but the accusations could not be proven and the Berlin Regional Court would not admit the prosecution's case in 2018.
The two operators of the brothel then took the city to court for wrongful detention before reaching a settlement with the administration.
"The state of Berlin apologizes for the pre-trial detention and the considerable disadvantages suffered by those accused at the time as a result of the search, the pre-trial detention, the indictment and the statements made by the public prosecutor's office," the city's judicial administration said in a statement on Friday.
Last December, the Berlin Court of Appeal ruled that comments made by the public prosecutor's office at a press conference were prejudicial, exaggerated, lurid and "culpably in breach of official duties."
It ordered the city administration to pay €100,000 in damages.
But the operators had also launched a second lawsuit for wrongful detention and demanded "a considerably higher amount," according to the city's judicial administration.
The apology and €250,000 compensation were part of a settlement reached by the city and the brothel operators. The case is now closed.
The operators' lawyer, Margarete Gräfin von Galen, said the settlement was "a good signal to restore confidence in the rule of law."
They claim they will use the cash to compensate the female employees who were detained at the time, and will donate the remainder to charity.