Nick McLaren reporting in ABC News Illawarra.
The payment covers $30,000 in costs and $30,000 in compensation and is due to be accompanied by a written acknowledgement that police were at fault.
Ms Warren turned to the Redfern Legal Centre in Sydney for assistance and a case was lodged against police.
"I don't even know if I would call it a protest," senior solicitor Samantha Lee said.
"It was a very small gathering of people who were just walking through the bush really with a small dog when Joanne was approached by a police officer.
"It was a Sunday morning it was very peaceful and unfortunately things escalated when the police arrived."
Ms Lee said police overstepped the mark.
"No action of violence was called for by the police officer," she said.
"She was then put into a ... wagon [and] all of this was just based on the potential of a minor offence of trespass."
