The move comes in response to scrutiny of the NYPD's tactics including stop-and-frisk searches and widespread surveillance of Muslims following 9/11.
"New Yorkers know that we can keep our city safe from crime and terrorism without profiling our neighbors," Councilman Brad Lander said at a late night meeting before the vote in the early morning.
Mayor Michael Bloomberg vowed to veto the measures, saying the NYPD will be "pointlessly hampered by outside intrusion and recklessly threatened by second-guessing from the courts."
Both measures passed with enough votes to override a veto.
Critics argue that the higher proportion of stop and frisk searches of minority groups are in line with higher crime rates, and that the tactics are responsible for reduced crime.
But just last month, based on publicly available NYPD crime data from 2012, the New York Office of the Public Advocate found that white people were far more likely to be carrying drugs or guns than minorities, despite making up a small proportion of targets in the controversial searches.
The NYPD uncovered a weapon in one out every 49 stops of white New Yorkers. By contrast, it took 71 stops of Latinos and 93 stops of African Americans to find a weapon. To uncover contraband, it took 43 stops of white New Yorkers, 57 stops of Latinos and 61 stops of African Americans.
Blacks and Latinos constitute 84 percent of all stops, despite comprising only 54 percent of the population. Innocence rates remain nearly 89 percent.
Of 532,911 stop-and-frisk searches in 2012, only 729 guns were found, but over 5,000 were arrested for private marijuana possession. Though possession has been decriminalized in the city, officers empty pockets during searches, bringing contraband into "public view" -- an arrestable offense.
The Council's measure that would create an outside Inspector General to oversee the department comes amid lawsuits against the NYPD for unconstitutional surveillance of Muslim communities and mosques in New York and New Jersey.
Four CIA analysts were embedded with the NYPD in the decade following 9/11, and according to a newly declassified CIA Inspector General report from 2011, the relationship was characterized by "irregular personnel practices."
Inspector General David B. Buckley wrote that the CIA is not permitted to engage in domestic surveillance, and that the operatives' actions did not constitute domestic spying. One analyst, the report said, believed there were "no limitations" on his activities, however, because he was on unpaid leave of absence, exempting him from the prohibition against domestic spying.