(Reuters) - Police in Moorhead, Minnesota, will return a $12,000 tip they seized from a struggling local waitress, her attorney said on Thursday.

Stacy Knutson, a server at the Fryn' Pan Restaurant in Moorhead, got the tip back in November from a customer who left a takeout box inside the restaurant.

Knutson followed the customer out to parking lot and tried to give her the box but the woman told her to keep it. When Knutson opened it, she found $12,000 in cash.

Knutson, a mother of five, called local police and turned in the cash as lost property.

At first, police said the cash would be hers if it remained unclaimed for 60 days, according to the lawsuit Knutson filed against the department.

At the end of the 60 days, however, the department told Knutson she would have to wait another 30 days to get the money.

Then police told her she would not receive the money at all because it smelled of marijuana and had been seized under a state law.

Police offered Knutson a $1,000 as a reward for turning the cash in. She refused the reward and filed suit.

In affidavits filed as part of the lawsuit, Knutson and two other restaurant employees said they detected no odor at all.

On Thursday, Craig Richie, Knutson's attorney, said the department had changed its mind and will return the $12,000 to her.

Richie said it was known around Moorhead that Knutson and her husband were having financial problems raising their five children. He said he believed the money was intended as a gift to the family.

"Stacy is a very religious woman and this is the will of God," he said on Thursday.

(Reporting by Richard Mattern, editing by Jackie Frank)