The $80,000 (£55,150) settlement was announced in a local court, but still needs city council approval.
Courtney Wilson and Taylor Guerrero say they were told to "take it somewhere else" when the policeman saw them kissing in a food store.
They later spent three days in jail after scuffling with the officer.
Honolulu City Council will consider the damages in early July. Donna Leong, of the city's Corporation Counsel, which advises on legal matters, said her department believed "the tentative settlement is in the best interests of the city".
'Glad it's over with'
Ms Wilson and Ms Guerrero were visiting from Los Angeles when the incident occurred last year.
After they initially complied with the order to stop kissing, the officer, Bobby Harrison, saw them being affectionate again and threatened to eject them from the store, their lawsuit said.
He later grabbed Ms Wilson by the wrist while she was at the checkout, the women said.
A scuffle broke out and the two were charged with assault, spending three days in jail.
The charges were later dismissed and Mr Harrison has since retired.
The women were a couple at the time but have now split up. Ms Guerrero still lives in Hawaii, saying she likes living in the US state.
On the settlement, she told the Associated Press news agency: "I'm just glad it's over with.''
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