Katie's attorney Jonathan Wolfe said in a statement:
"The case has been settled and the agreement has been signed. We are thrilled for Katie and her family and are excited to watch as she embarks on the next chapter of her life."
Wolfe added: "We thank Tom's counsel for their professionalism and diligence that helped bring about this speedy resolution."
Katie filed for divorce from Tom last month after five years of marriage, asking for full legal custody of the couple's 6-year-old daughter Suri.
No more details have been confirmed about the settlement, but sources close to the couple told People Magazine that the two were working on an arrangement that allowed Suri to live in New York with Katie while Tom would be granted visitation rights.
The divorce settlement comes shortly after the former coupe released a joint statement about the divorce.
They said: "We are committed to working together as parents to accomplishing what is in our daughter Suri's best interests."We want to keep matters affecting our family private and express our respect for each other's commitment to each of our respective beliefs and support each other's roles as parents."