Los Angeles Superior Court officials said in a statement late Friday that Gibson and Russian musician /*Oksana Grigorieva*/ had reached an agreement after days of negotiation. Terms and conditions of the settlement were not announced, but a hearing Wednesday will be held to discuss the financial terms.
The equally contentious issue of custody of the couple's infant daughter will be handled in closed session, the court announced.
Gibson's spokesman Alan Nierob confirmed the settlement and said the actor-director appreciated the judge's help in mediating the case.
Grigorieva spokesman Stephen Jaffe declined comment.
The former couple have sparred for more than a year over custody and financial issues in a mostly-secret court proceeding in Los Angeles. In June 2010, Gibson's attorney Stephen Kolodny said that his client had provided his ex-girlfriend with a four-bedroom, multimillion dollar home, vehicle and tens of thousands of dollars a month.
It is unclear exactly how much Grigorieva has been receiving since then.
The "Braveheart" star was charged with misdemeanor domestic battery as a result of a January 2010 fight with Grigorieva and pleaded no contest earlier this year. The actor-director entered his plea in a way in which he admitted no guilt, and Grigorieva cannot use the outcome in a civil case.
He was ordered to undergo counseling and recently completed his community service by volunteering with a children's charity in Guatemala.
The case became an international story after recordings of racist and sexist rants by Gibson were leaked to the celebrity website RadarOnline.com. Sheriff's officials took possession of the recordings as part of their criminal investigation, but Grigorieva's attorney announced in May that he would no longer seek to use them against the former Hollywood superstar in the custody case.
The coming days could prove crucial for Gibson to resolve some of the messiness of his personal life in recent years.
Gibson, 55, recently reached a divorce settlement with his estranged wife, Robyn, and his attorney announced in June that the case should be finalized by Tuesday.
Robyn Gibson filed to end her nearly 28 year marriage in April 2009, just months before Grigorieva gave birth. The divorce has been a mostly private affair, in sharp contrast to Gibson's fight with Grigorieva.
Gibson announced Grigorieva's pregnancy to Jay Leno on "The Tonight Show," but their relationship sputtered after the girl's birth.
In recent months, both have appeared multiple times in court for hearings and meetings with a judge handling their case. Gibson has not publicly spoken about the case.
The leaked conversations recorded by Grigorieva were the latest scandal for Gibson, who was arrested in 2006 for drunken driving; a deputy's report revealed he made a series of anti-Semitic and sexist slurs while in custody.
Despite positive reviews for his performance as a deeply depressed man who can only communicate through a puppet, Gibson's return to the big screen in "The Beaver" earlier this year failed to catch on with audiences.