The word comes in an exclusive interview by "Early Show" features reporter and weather anchor Dave Price of L. Londell McMillan, the attorney for Katherine Jackson.
He says Katherine, 79, and Debbie Rowe, the biological mother of two of Jackson's kids, have come to terms.
Sources tell CBS News Katherine will get full custody and Rowe will have visitation rights, but won't be getting any money under terms of the pact.
There had been reports, hotly denied by Rowe, that she had previously agreed to accept a large sum of money to relinquish all her parental rights.
The accord would appear to head off what some observers has predicted would be a bitter custody battle between the two women.
"It's an agreement, an agreement for the best interests of the children. This is not a money deal. This is not about money. ... "There is no situation better for these children than for them to be raised and reared in the loving care of Mrs. Katherine Jackson," McMillan told Price.
In the wide-ranging interview, McMillan, who's also represented such big-name celebrities as Kanye West, Stevie Wonder, Spike Lee and Prince, and who owns The Source magazine, also discussed the battle over Jackson's estate, the pending autopsy results, how the family is coping with Jackson's death, and rumors of a fourth Jackson child.
He estimated that Michael's estate could be worth as much as $2 billion.
There have been reports that the entire Jackson clan has agreed that Michael's eldest sibling, his sister, Rebbie, should be the one to raise the kids, should Katherine get custody, as called for in Jackson's only known will.
Michael's kids, Michael Joseph Jackson Jr., known as Prince, Paris Michael Katherine Jackson, and Prince Michael Jackson II, known as Blanket, have been staying at the Jackson family home in Encino, Calif., with Katherine, as called for in Michael's will.
McMillan sought to dispel concern that Michael's father, Joe Jackson, would be involved with raising the kids, saying, "I don't think it's valid at all. I think Joe Jackson is the husband of Mrs. Jackson, but he's not living in Los Angeles."
What about Omer Bhatti, who's close to the Jackson family and has been rumored to be Michael's fourth child?
"I'm not in the rumor business," McMillan said. "I'm in the law business. I'm not going to even entertain those questions right now."
The Jackson will names two long-time business partners, John McClain and John Branca, to manage his estate. Katherine gets 40 percent, but she'son all business matters.
Howard Weitzman, an attorney for McClain and Branca, said in a statement that the allegation that the pair had "not been forthcoming in providing information to Katherine Jackson's attorneys is not accurate."
According to Weitzman, Katherine Jackson's team is trying to "rewrite Michael's will" to make her the executor.
"He's incorrect," McMillan asserted. "Mrs. Jackson is not contesting the will. We are not trying to rewrite the will. Our concern is for anyone to have extraordinary powers, they need to have extraordinary trust and integrity."
"The question," McMillan also said, "is what happened to this will in 2002? How come no one knew about it? How come Mrs. Jackson didn't know about it? How come I didn't know about it? How come we learned about it the day we filed a petition in court stating he died without a will?"
The stakes are high in the battle over the estate. Despite being in debt by $331 million when he died, Jackson's estimated net worth was $236 million. And that doesn't include the boom in sales of his musicsince his death.
"That estate," says McMillan, "is worth, in my estimation, a couple of billion dollars. You hear $500 million. Don't buy it."
Katherine applied for emergency funds, Price pointed out. Is she broke?
"I don't know where the broke issue comes -- came from," McMillan responded. "Mr. Jackson was very generous and provided for resources for his mother and his family and certainly his children."
The $2 billion estimate, Price notes, is "if the estate achieves its potential earnings, and that's if the estate is managed effectively. Clearly, Michael Jackson in death could be even more of an industry than he was during his lifetime."