Cheryl Walker had sought to be named as the sole guardian over the late actor's estate and his 15-year-old daughter Meadow, but she has now requested a dismissal of her petition as she wants to settle it outside of the court, according to PEOPLE.com
It was believed last month that Cheryl would abandon her custody bid if Meadow's mother Rebecca Soteros sought treatment in rehab for her "serious drinking problem".
Rebecca promised last month to check into rehab immediately and also agreed to regular drug testing after completing her stint as being with Meadow is the "most important thing" to her.
Meadow began living with her famous father full-time in California three years before his death, after moving there from Hawaii, where her mother - who was arrested in 2003 and 2013 for drink driving - raised her.
The youngster is set to inherit Paul's entire fortune of a reported $25 million after he named her as the sole beneficiary in his will.
The star also appointed his father Paul Walker Sr. as the executor, and stated that Cheryl should become Meadow's legal guardian.
It was previously claimed Rebecca was happy for Meadow to live with Cheryl, who is a nurse, after the death of Paul in November because she wanted to stay in California.
The late actor perished alongside his friend Roger Rodas on November 30, when the car they were travelling in lost control and crashed in Santa Clarita, California.