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WASHINGTON, March 6 (Reuters) - U.S. Attorney General Eric Holder said on Friday the Justice Department would use its full authority to demand police reforms in Ferguson, Missouri, including possibly going so far as dismantling the department accused of racial bias.

"We are prepared to use all the power that we have ... to ensure that the situation changes there," Holder told reporters.

Asked if that included dismantling the Ferguson Police Department, Holder said, "If that's what's necessary, we're prepared to do that."

Civil rights lawyers have previously said the county could absorb the functions of the Ferguson Police Department.

The Justice Department issued a report this week that found that police in Ferguson overwhelmingly arrested and issued traffic citations to black residents, creating a "toxic" environment with its policing practices.

That culture of distrust erupted in August, when white Ferguson Officer Darren Wilson fatally shot 18-year-old Michael Brown, who was black and unarmed. The incident triggered months of protest and a national debate about race and police behavior.

Holder also said President Barack Obama's task force on policing will issue guidelines to address jailing citizens who owe money to the city, a practice used in Ferguson. But he noted that the federal government does not have the authority to demand such a change of local governments.

Ferguson city officials will meet with the Justice Department in about two weeks to begin negotiating an agreement on reforms, Ferguson Mayor James Knowles said.

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Eric Holder Prepared To Dismantle Ferguson Police ...

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Attorney General Eric Holder said the Department of Justice could go as far as dismantling the Ferguson Police Department to ensure change after the DOJ report that found it discriminated against blacks in the Missouri city.

We are prepared to use all the powers that we have, all the power that we have to ensure that the situation changes there and that means everything from working with them to you know coming up with an entirely new structure, Holder told reporters on the tarmac of Andrews Air Force Base today.

Asked if that includes dismantling the police department, Holder said, If that's what's necessary, we're prepared to do that."

Earlier in the day, Fergusons mayor announced the citys court clerk was fired and two police officers resigned after the three allegedly sent vulgar and racist e-mails. The changes came two days after the DOJ report found Ferguson police systematically discriminated against blacks.

Speaking in South Carolina today, President Obama defended the Justice Departments findings, saying its investigation into racial bias by the department was very clear.

What we saw was that Ferguson police department in conjunction with municipality saw traffic stops, arrests, and tickets as revenue generators as opposed to serving, the president said at a town hall at Benedict College in Columbia, S.C. The president added the overwhelmingly white force was systematically biased, placing minorities under its care into an oppressive and abusive situation.

On Wednesday, the Department of Justice announced it would not pursue charges against Officer Darren Wilson, the Ferguson police officer responsible for the shooting death of 18-year-old Michael Brown.

ABC News' Chris Good and Matt Larotonda contributed to this report.

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Eric Holder: Justice Dept. 'Prepared' to Dismantle ...

WASHINGTON (MarketWatch) Attorney General Eric Holder said he is ready to take all steps needed to reform the police department in Ferguson, Mo., including potentially dismantling the force.

Speaking to reporters in Washington on Friday, Holder said he was stunned by what a Justice Department report released Wednesday showed about the Missouri citys police force. The report found widespread racial bias at the police department.

Also read: Justice Department finds no evidence for Hands Up, Dont Shoot.

We are prepared to use all the powers that we have, all the power that we have, to ensure that the situation changes there, Holder told reporters at Andrews Air Force Base after a trip to South Carolina with President Barack Obama.

That means everything from working with them to coming up with an entirely new structure, Holder said, according to the Washington Post. When asked if that included dismantling the department, Holder said, If thats whats necessary, were prepared to do that.

Holders remarks came after two police supervisors in Ferguson resigned after being linked to racist emails uncovered by the Justice Departments investigation. A third employee was fired for her role in the emails, the New York Times reported.

While the Justice Department found bias at the Ferguson police department, it did not file federal civil-rights charges against the former police officer who shot an unarmed African-American teenager last year. Justice said the legal threshold for such a case hadnt been met.

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The Margin: Holder prepared to dismantle Fergusons police department if necessary

Carolyn Kaster/AP Photo Attorney General Eric Holder speaks at the Justice Department in Washington, Wednesday, March 4, 2015, to discuss the Aug. 9, 2014 shooting in Ferguson, Mo.

Attorney General Eric Holder saidFridaythat he is "prepared" to dismantle the Ferguson, Mo., police department to prevent practices the Justice Department said violated the rights of black citizens.

"We are prepared to use all the powers that we have, all the power that we have, to ensure that the situation changes there," he said. "That means everything from working with them to coming up with an entirely new structure."

Holder was also specifically about the possibility of dismantling the police force.

"If that's what's necessary, we're prepared to do that," he said.

Holder's comments come after the Justice Department released a lengthy reporton Wednesday accusing the police department of systematic racial bias.

The DOJ launched its investigation into the force after the killing of unarmed black teenager Michael Brown over the summer by a white police officer, Darren Wilson.

Provided by The Hill Holder 'prepared' to dismantle Ferguson police department

The report found that police officers disproportionately stopped, arrested and cited black people for a variety of crimes. They also used excessive force against black residents.

Investigators also found emails containing racist jokes written by police and court officials.On Friday, city officialssaidthat two officers had resigned and a clerk in the court system had been fired over the messages.

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Holder 'prepared' to dismantle Ferguson police department

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Attorney General Eric Holder said the Department of Justice could go as far as dismantling the Ferguson Police Department to ensure change after the DOJ report that found it discriminated against blacks in the Missouri city.

We are prepared to use all the powers that we have, all the power that we have to ensure that the situation changes there and that means everything from working with them to you know coming up with an entirely new structure, Holder told reporters on the tarmac of Andrews Air Force Base today.

Asked if that includes dismantling the police department, Holder said, If that's what's necessary, we're prepared to do that."

Earlier in the day, Fergusons mayor announced the citys court clerk was fired and two police officers resigned after the three allegedly sent vulgar and racist e-mails. The changes came two days after the DOJ report found Ferguson police systematically discriminated against blacks.

Speaking in South Carolina today, President Obama defended the Justice Departments findings, saying its investigation into racial bias by the department was very clear.

What we saw was that Ferguson police department in conjunction with municipality saw traffic stops, arrests, and tickets as revenue generators as opposed to serving, the president said at a town hall at Benedict College in Columbia, S.C. The president added the overwhelmingly white force was systematically biased, placing minorities under its care into an oppressive and abusive situation.

On Wednesday, the Department of Justice announced it would not pursue charges against Officer Darren Wilson, the Ferguson police officer responsible for the shooting death of 18-year-old Michael Brown.

ABC News' Chris Good and Matt Larotonda contributed to this report.

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Eric Holder: Justice Dept. Might Dismantle Ferguson Police Dept.