FERGUSON, Mo. - The Ferguson City Council on Tuesday evening unanimously approved a decision to part ways with City Manager John Shaw after a scathing Justice Department report that already had led to a Missouri appeals court judge's being tapped to overhaul the local court system.

The City Council in the St. Louis suburb, simmering in anger since a white police officer fatally shot 18-year-old Michael Brown last summer, held its first public meeting since the U.S. Justice Department last week accused its police force and municipal court system of racial bias.

A news release from the city said the Council had reached a "mutual separation agreement" with Shaw, 39, effective immediately. The statement also said a nationwide search for Shaw's replacement would begin immediately.

"I believe that the city of Ferguson has the resolve to overcome the challenges it faces in the coming months and emerge as a stronger community for it," Shaw said in a statement included in the release.

The Justice Department investigation already had resulted in a shake-up: Racist e-mails included in the report led to the firing of the city clerk and resignation of two police officers last week.

And Monday, Municipal Judge Ronald J. Brockmeyer resigned and was immediately replaced by the Missouri Supreme Court with a state appellate judge empowered to overhaul court policies to "restore the integrity of the system."

Since Brown's death seven months ago, Mayor James Knowles has been the public face and voice of Ferguson's city government. But it was Shaw who was its chief executive and who held the legal power to make personnel and policy changes in the police department - not Knowles, a part-time officeholder who earns less than $5,000 annually.

Shaw had been Ferguson's city manager for eight years. He has not spoken publicly about the shooting, protests, grand jury inquiry, or Justice investigation.

The Justice report repeatedly cited Shaw's role in encouraging police to aggressively ticket motorists as a means to generate revenue.

He denied his office had urged police to target African Americans.