Cherry Hill has agreed to pay the 42-year-old up to $7,000 and $21,000 in legal fees.
The township also will post signs warning detainees that the toilets are monitored by a surveillance camera.
Haddonfield attorney Joseph Osefchen told The Courier-Post of Cherry Hill the agreement should prevent others from using the bathroom without knowing they're being videotaped.
Township spokesman Dan Keashen told the newspaper it made "financial sense" to reach the settlement.
The woman had been arrested on drunken driving charges in March 2009. Her name was not released.
A federal judge still needs approve the settlement.
Information from: Courier-Post