A jury in February determined that Ovasapyan, of Sunland, had been wrongly imprisoned for eight months while the Los Angeles County district attorney's office decided whether to move forward with charges against him in the 2005 shooting death of 21-year-old Glendale resident Christopher Shahanzari.
Ovasapyan's attorney, Mark Geragos, has criticized the city for drawing out the case, pointing out that the City Council rejected a previous $400,000 settlement offer. Howard has said that the proposal came only days before the trial was scheduled to start.
Geragos could not be reached for comment Monday.
City attorneys in June appealed the decision to the federal 9th Circuit Court of Appeals, but in December a three-judge panel upheld the $1.31-million judgment.
Howard said city officials had expected a more thorough review of the case by the appeals court.
"I would have hoped the court of appeal would have determined that the fact was, the officers had probable cause," he said. "The 9th Circuit really didn't pay much attention, in my opinion."
At the time of the murder, police determined there was enough probable cause to arrest him, and turned their case over to the county district attorney's office, which filed murder charges.
He remained in county jail while awaiting a preliminary hearing. During that time, two police detectives eventually collected DNA evidence at the shooting that led to another suspect, who was identified by Shahanzari's mother as the alleged shooter. That evidence eventually exonerated Ovasapyan.
Howard said the city was up against a case where the district attorney's office was immune from being held financially liable.
"Perhaps emotion got in the way," he said. "But from Day One, we always felt the officers did the best they could to try to exonerate this guy."
The settlement will be paid from the city's liability insurance fund, which has been hit hard in recent years by multimillion-dollar payouts stemming from lawsuits related to the 2005 winter storms.