The five-member board voted unanimously on Friday, two days after the chief offered to step down.
Mokwa has faced growing scrutiny amid an investigation into the use of impounded cars by the police department and by Aimie Mokwa, his daughter.
Mokwa's severance package is worth more than $100,000. It includes a full year's salary, plus retirement benefits.
Though the vote to accept Mokwa's offer of retirement was unanimous, Mayor Francis Slay, an ex officio member of the police board, was the only person to vote against the severance package.
Mokwa served in the police department for 37 years, and spent the last seven as chief.
Assistant Chief Steve Pollihan will be the acting chief until a new head of the department is named.


