The 79-year-old's lawyers say she's agreed terms with the star's ex-wife Debbie Rowe.
'It's an agreement, an agreement for the best interests of the children,' Katherine's attorney L. Londell McMillan tells The Early Show.
'This is not a money deal. This is not about money. All of the parties are resolved.
'There is no situation better for these children than for them to be raised and reared in the loving care of Mrs Katherine Jackson.'
Debbie, 50, is the mother of Prince Michael, 12, and Paris Katherine, 11.
She is expected to have visitation and legal parental rights.
All parties involved are expected to appear at the Los Angeles Superior Court next week.