Aug. 7, 2014: Jon Daniel speaks at the American Civil Liberties Union of Illinois office in Chicago. (AP)

An Illinois city agreed Wednesday to pay $125,000 to settle a lawsuit filed by a man whose home was raided by police over a Twitter account he created depicting the city's mayor as a fan of drugs and alcohol.

The deal calls for the city of Peoria to send its police department a directive emphasizing that parody doesn’t fall under an Illinois statute of regulating false personation of a public official, which was used to obtain warrants to arrest Jon Daniel. The deal does not include an admission of wrongdoing by the city.

The City Council still needs to approve the deal, but an attorney for the city told the Associated Press the settlement made financial sense.

Daniel's attorneys called the deal “a civics lesson” for governments around Illinois that parody isn’t a cause for a police investigation.

"I always thought that the Twitter account was a joke for me and for my friends," Daniel said in an emailed statement to The Associated Press. "I never dreamed that it would result in my home being raided and me being placed under arrest."

Daniel created the Twitter account in March 2014, writing as Peoria Mayor Jim Ardis and focusing on alcohol, drugs and sex.

"Im (sic) thinking it's tequila and stripper night," one message said.

Twitter suspended the account shortly after Daniel added an indicator that the profile was intended as a parody. In April, police acted on a complaint from Ardis and raised the home Daniel shared with several roommates, taking computers and smartphones.

Free speech advocates and other widely used parody accounts slammed the raid. The local prosecutor declined to file charges. There were at least three other Jim Ardis parodies on Twitter as of Wednesday, The Associated Press reported.

Fake social media accounts pretending to channel the thoughts of elected officials and celebrities have been around for almost as long as the platforms themselves. Some officials have even laughed along with the parodies. Rahm Emanuel acknowledged the foul-mouthed Twitter parody of him a journalism professor created when he was running for mayor of Chicago was often entirely on the mark.

Attorney Jim Sotos, who represented the city, said Peoria would have spent far more if Daniel's lawsuit went to trial.

"When the opportunity to settle for that low a number presented itself, settling was the only fiscally responsible thing" to do, Sotos said.

Sotos added that Illinois' False Personation of a Public Official Statute could probably stand to be updated to indicate that it doesn't apply to satire aimed at public officials.

One of Daniel's attorneys said other governments in Illinois should be paying attention.

"We hope that every municipality across the state is watching," said Marc Beem, a Chicago attorney who worked with the American Civil Liberties Union.

The Associated Press contributed to this report.