The decision was made after a meeting between Katherine Jackson and her lawyer Perry Sanders Jr. on Thursday. He said Michael Jackson's eldest son has told attorneys he approves of the arrangement.
The proposed arrangement could be presented to a judge next week. If approved, it would make Tito Joe "TJ" Jackson a co-guardian of the children - Prince, Paris and Blanket - who range in ages from 10 to 15.
"Mrs. Jackson is extremely pleased with the prospect of enjoying the pleasure of raising Michael's children without the day-to-day tedium of items such as managing the large staff that goes with such a high-profile family and focus her attention on being a grandmother and raising Michael's children," Sanders wrote in a statement.
"She is eager to simply enjoy her great relationship with these children, while deeding over some of the stressors that go hand in hand with being a guardian," he wrote.
A judge on Wednesday suspended Katherine Jackson's guardianship duties temporarily and appointed TJ Jackson as temporary guardian. He was expected to file a petition on Friday to become the children's permanent guardian, but Sanders said that is a formality meant to abide by court orders.
The agreement came after days of turmoil in the Jackson family, including questions about Katherine Jackson's health and whereabouts.
Superior Court Judge Mitchell Beckloff said there were no indications the 82-year-old had done anything wrong, and he would likely re-instate her as guardian upon her return.
Katherine Jackson had been at a Tucson, Ariz., spa since July 15 with her daughter Rebbie and other relatives and had not spoken to her grandchildren during that time.