The joint investigation found safety concerns, the statement said.
CNN learned of development through Twitter.
In the video, the diapered child is bombarded with obscenities and racial slurs by the adults around him.
The African-American toddler knocks down a chair and gives nearly as good as he gets, responding to some of the comments with an upraised middle finger and telling one of the adults at one point, "Shut up, bitch." The adults laugh and prompt him to repeat other crudities.
Just another day on the Internet -- until the police union in Omaha, Nebraska, posted the clip on its website to highlight what it called the "cycle of violence and thuggery" the community faces.
The Omaha Police Officers Association came under fire from the city's police chief, the ACLU and at least one community leader. They say the move needlessly antagonizes the city's minority communities, who make up about a quarter of Omaha's 409,000 residents.