The settlement came down hours before the famous parents were due in court.
Madonna and Guy Ritchie have resolved their differences over the custody of their 16-year-old son, Rocco, according to court documents obtained by ET.
On Wednesday, a judge allowed Madonna to dismiss her custody case in New York City and settle matters outside of court. The 58-year-old singer's decision comes after a U.K. judge ruled in March that the dispute over Rocco's residency would be decided in a New York court or through family mediation.
WATCH: Madonna and Son Rocco Reunite in New York City, Wear Creepy Masks for Family Night Out
"Most importantly, as I observed during the course of the hearing, summer does not last forever. The boy very quickly becomes the man," Justice MacDonald said at the time, according to court docs obtained by ET. "It would be a very great tragedy for Rocco if any more of the previous and fast receding days of his childhood were to be taken up by this dispute."
Rocco, Madonna's eldest son, was living in London with his father since late last year amid a long custody battle over his living arrangements. However, Rocco and his mom reunited in NYC in June, and have appeared to be on good terms ever since.
In August, the singer celebrated Rocco's 16th birthday with several sweet photos and messages. "Happy Birthday to my First Born Son!" one caption read. "A true Warrior with a beautiful Heart. Let the Sun shine."
In another message, the proud mother wrote: "Once my baby always my baby. Happy Sweet 16!"
WATCH: Madonna and Rocco Ritchie Pose for Bizarre Magazine Spread Following Reconciliation