This is coming less than two weeks after they filed for divorce.
“The case has been settled and the agreement has been signed,” Holmes’ lawyer Jonathan Wolfe said in a statement to People magazine.
“We are thrilled for Katie and her family,” he added.
A spokeswoman for Cruise confirmed the settlement in an email to Reuters: “It is done.”
In a joint statement on Monday, the pair said they were “working together” to settle custody of their daughter Suri, six.
“We are committed to working together as parents to accomplish what is in our daughter Suri’s best interests,” the statement read.
“We want to keep matters affecting our family private and express our respect for each other’s commitment to our respective beliefs and support each other’s roles as parents.”