SAN JOSE  (AP) — A Northern California city is expected Tuesday to pay $150,000 to settle a lawsuit filed by a man accused of rape who was the subject of a phony lab report prepared by police.

The San Jose Mercury News reported that the San Jose City Council is expected to approve the settlement at its meeting later Tuesday. The agreement also included $1 million in lawyer fees.

The yearslong lawsuit stems from the San Jose Police Department arrest of Michael Kerkeles in 2005. Kerkeles was accused of raping his developmentally disabled next-door neighbor. In hopes of tricking Kerkeles into confessing, San Jose police created a false lab report showing Kerkeles' semen appearing on the blanket the woman said was used in the alleged rape.

Kerkeles was never confronted with the phony report until his preliminary hearing. Police Sgt. Matthew Christian testified that the phony report was real and a judge found enough evidence to hold Kerkeles for trial.

After the hearing, though, it was discovered in 2005 that the lab report was phony. After Kerkeles rejected an offer to plead guilty to reduce charges with no jail time, prosecutors dropped all charges.

"In our view, that was a huge mistake," San Jose City Attorney Rick Doyle told the paper, referring to the presentation of the phony document in court and Christian's testimony about the report.

Kerkeles filed his lawsuit in 2006. The city fought the lawsuit for years, arguing that the police officer believed the report to be real when he testified at the preliminary hearing and simply made a mistake.

A lower court tossed out the lawsuit, but the court of appeals reinstated it in 2011.

The Mercury News reported that Christian remains on the job. Kerkeles declined comment.

"It's a significant sum, but Mr. Kerkeles certainly wouldn't trade the money he got for what he went through," lawyer Matt Davis told the Mercury News.