The disciplinary action is in connection with the beating death of Darrin Hanna last November.
Four other officers and a supervisor linked to the fatal beating are back on the job.
Friday's decision isn't the one Hanna's family wanted to hear, that only two of the six officers involved in his arrest are going to face disciplinary action and that the others, including a supervisor, are cleared of any wrongdoing.
"Four other officers who were temporarily placed on leave pending the outcome of this investigation will be returning to full duty immediately," said North Chicago Police Department Interim Police Chief James Jackson.
There was a strong reaction by the friends and family of Hanna after police and city officials announced their decision to return four officers involved in his violent arrest back to the job. Voices of dissent could be heard screaming, "Cover up!"
"Is this gonna happen to another mother? And when is this gonna stop? It's a cover-up, a plain cover-up," said Hanna's mother Gloria Carr.
Officer Brandon Yost was fired for putting the 45-year-old in a chokehold and lying about it, while Officer Arthur Strong was suspended for 30 days without pay for falsifying a police report in connection with the November 2011 arrest.
"The public needs to understand that they were reached based on clinical review of the facts, and not on a rush to judgment," said North Chicago Mayor Leon Rockingham Jr.
The decision angered a conference room filled with Hanna's supporters who say there is a pattern of police brutality in the northern suburb.
"These six officers should be fired, and they should be charged with murder," said Jesse Jackson.
Hanna died a week after a November 6 arrest after officers say he was beating and trying to drown his pregnant girlfriend.
Hanna died in a hospital of multiple factors, including physical restraint and Taser shocks, as well as chronic cocaine abuse, hypertension, and sickle cell disease.
An attorney for the officers says they were scapegoats.
"I am saying that Mr. Hanna himself is at fault," said Laura Scarry.
Hanna's death prompted an investigation by Illinois State Police. The Lake County state's attorney's office concluded officers committed no crime.
Still, there are those who say justice has not been done.
"All I can say to the citizens of North Chicago, as an alderman, I'm sorry this has happened. This is not right," said North Chicago Alderman Charles January.
Hanna's family, along with Rev. Jesse Jackson, said they want the U.S. Department of Justice to launch its own investigation.
The interim police chief said he is going to do more to make sure officers are properly changed. They also will change the way uses of forces are documented and possibly equip squad cars with cameras.