Birkhead emerged victorious from a Bahamas courtroom on Tuesday afternoon and said to reporters, "I told you so. … My baby is going to be coming home pretty soon. I'm the father."
The paternity of the 7-month-old had been one of the biggest questions surrounding the Smith saga.
Dr. Michael Baird, who analyzed the results of a March 21 DNA test, announced the results outside the court. "Essentially, he's the biological father," Baird told reporters.
Birkhead jubilantly announced the DNA results after the closed hearing, and then hugged his rival, Howard K. Stern.
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Stern said he would not fight for custody. "I'm obviously very disappointed but my feelings toward Dannielynn have not changed," Stern said, adding Birkhead can come to his Bahamas home to visit the baby at any time.
Even Smith's mother, Virgie Arthur, who had also sought custody, seemed appeased by the DNA results. "I'm happy that Dannielynn will know who her real father is," she said outside court.
Birkhead and Stern arrived for a closed session on Tuesday in the custody fight over the girl who could inherit a fortune in the wake of her mother's death in February.
As Birkhead entered the pale pink colonial courthouse in downtown Nassau, he gestured to his large entourage of family members: "I've got a large group of people here, and I'm hoping to leave with one more."
Birkhead, a Los Angeles photographer, began seeking custody of Dannielynn before the reality TV star collapsed and died in a Florida hotel on Feb. 8.
2"Access Hollywood" reported before the hearing that while the two men have not reached an official agreement on paper, Birkhead confirmed that Stern will not continue his custody fight should Birkhead be the father.
"We talked and I guess what Howard wants to do and what we both agreed upon is we both want to do what's best for Dannielynn," Birkhead said. "Any time anyone says they're not gonna fight you in this kind of battle is music to my ears."
The baby, whose full name is Dannielynn Hope Marshall Stern, could inherit millions from the estate of Smith's late husband, J. Howard Marshall II. The former model had been fighting the Texas oil tycoon's family over his estimated $500 million fortune since his death in 1995.