Within the framework of the settlement, both sides approved Frank McCourt's 17-year TV contract between the Dodgers and Fox. That deal has been reported to be worth $3 billion and Frank McCourt would receive $385 million up front.
Frank McCourt has been struggling to make payroll, and the Fox deal would end that problem for years to come.
Major League Baseball has yet to approve the deal, and MLB Commissioner Bud Selig said he would not decide on the deal until an investigation into the team's finances is complete.
Thursday was the deadline to reach an agreement, but L.A. County Superior Court Judge Scott Gordon extended that deadline when lawyers said they were close. The McCourts' lawyers had spent several sessions in front of Gordon to reach an agreement and they worked throughout the night before striking a deal shortly before Friday's hearing began.
The one-day trial was scheduled for Aug. 4.
If the trial goes in Jamie McCourt's favor, the team, stadium and surrounding property - worth hundreds of millions of dollars - would be split between the former couple, according to the settlement.
If the trial goes in Frank McCourt's favor, he would give his ex-wife $100 million and she would retain six luxurious homes. He also will continue to pay monthly spousal support up to $650,000, the agreement said. Of the $100 million, Frank McCourt would need to pay $55 million within the first 10 days of approval of the Fox TV deal. The remaining $45 million would be paid within the next 24 months.
However, if the MLB does not approve the Fox deal, the entire settlement would be void, and the two would head back to divorce court. Attorneys hope approval from the MLB will drop as early as next week.
Speaking outside of the courthouse Friday, Frank McCourt apologized to fans for dragging them through the divorce mud. However, he also said he's pleased and relieved to put this phase in the past and "go play and win baseball games."
Jamie McCourt released a statement Friday regarding the settlement announcement: "Resolving this matter is my top priority and I hope today was a step in that direction. I love the Dodgers, the fans, and the community. Reaching a resolution is the most important thing for my family, my children, and certainly for the fans and for baseball. I have been trying to accomplish this for the past two years, and the sooner it's completed, the better."
Friday's settlement announcement did little to change fans' attitudes regarding the McCourts.
For now, the ownership of the Dodgers is still in limbo, and fans are shaking their heads. Fans were quick to voice their frustrations with the McCourts' divorce drama, but there was still no clear consensus on whether or not they want the troubled owners to sell the team.
"Relationship-wise, it's going to get into the business because she's already trying to take half of the team, so you know, you might as well just sell it because at the end, she's going to end up owning it, and decisions may go wrong with her," said Neal Ramirez of downtown Los Angeles.
Another Dodgers fan, Gilda Manukian of Pasadena, said she wants whatever's best for baseball.
"I want to see it being played. If it means selling, then for sure," said Manukian.
Host Max Kellerman of 710 ESPN Radio said all of the drama has led to one of the worst things for a sports franchise - not fan hate or rage, but rather fan apathy.
"Maybe the fans should be hoping that the judge rules in favor of Jamie McCourt, of the Dodgers being community property, because in that case, they're going to be forced to sell the team," said Kellerman.
A 2004 postnuptial agreement that gave Frank McCourt sole ownership of the team was struck down last December. Jamie McCourt has claimed ownership over half the team and has asked the judge to order the sale of the team, which some experts believe is in Frank McCourt's best interest.
Major League Baseball seized control of the team's financial operations in April. Former Texas Rangers president Tom Schieffer was appointed to monitor the team on behalf of Selig, who said he took the action because he was concerned about the team's finances and how the Dodgers are being run.
The McCourts' lavish lifestyle was exposed in court documents where it was revealed that they took out more than $100 million in loans from Dodgers-related businesses. Their spending habits were likened to using the money from the team as if it was their personal ATM or credit card.
The Dodgers organization has encountered difficulty in meeting the team's payroll, but has so far met its financial requirements on time.
The Associated Press contributed to this report.