Craigslist's "erotic services" sections will be eliminated and replaced with a new "adult" page. The posts there will be reviewed by company employees before publication, the Chicago Tribune reported.

Current erotic ads will be phased out of the site as they expire over the next seven days, which will put an end to what Illinois Attorney General Lisa Madigan calls "an Internet brothel" and "an illegal and dangerous place."

The agreement to discontinue the erotic services was reached after a meeting last Tuesday, when Madigan presented evidence that Craigslist's flagging system, intended to block inappropriate posts, was unsuccessful. Craigslist will now review posts to the adult section of the site, and reject any that propose illegal activities. The price to post on the site will also increase from US$5 to $10, with a $5 renewal fee, the Chicago Tribune reported.

"We are optimistic that the new balance struck today will be an acceptable compromise from the perspective of these constituencies, and for the diverse U.S. communities that value and rely upon Craigslist," the online classified site said in a statement.

Madigan's office, which has been monitoring the site since November 2008, said it will continue checking up on Craigslist, looking for "thinly veiled" ads.