This happened only less than two weeks after Holmes unexpectedly filed for divorce, lawyers for the couple said.

The resolution was notably quick, particularly in Hollywood terms, saving the couple from a public battle that is sure to be covered vigorously by the media, which have already shifted into hyper-drive and, more evidently, money.

A drawn-out custody battle would have likely cost them more than a million dollars in legal fees.

In a joint statement, Cruise and Holmes asked for privacy for their family, including 6-year-old daughter Suri.

Their representatives refused to elaborate on the agreement, saying only that terms of the settlement were confidential.

The next step would be for Holmes or Cruise to file to have their status changed to divorced, but that the actual financial and child custody details won't get filed in court unless there's some later dispute, said Steve Mindel, a managing partner in the Los Angeles firm Feinberg, Mindel, Brandt and Klein who has handled bi-coastal divorce cases.