Wade will pay his ex-wife $5 million, and there is a non-disparage agreement in the settlement, the Chicago Sun-Times reported.
Siohvaughn Funches, Wade's ex-wife, grabbed attention last week when she protested outside a Chicago courthouse with a sign that implied she was homeless because of a lack of support from Wade.
"Ms. Funches has made a mockery of homelessness which is a serious and personal issue for Mr. Wade as his mother was homeless for a period of time when he was a child," Wade's attorney, James B. Pritikin, said in a statement.
Wade initially filed for divorce from Funches, who is the mother to his two sons, in 2007. Wade won a separate long court battle in 2011 to get full custody of his children. Wade lives in Miami.
Pritikin said Wade has been providing $25,000 in monthly support for Funches, paying for a mortgage, four cars, insurance, taxes and attorney fees.
Earlier this month, Funches filed a lawsuit against Wade for failure to pay income from endorsement contracts as part of a 2008 agreement. That lawsuit was dismissed by the court last week, according to Wade's attorney.
Funches was arrested last year on misdemeanor charges of attempted child abduction, unlawful visitation interference and obstruction of a peace officer after an incident related to her visitation with the couple's sons. According to the Chicago Sun-Times, all the charges except obstruction of a peace officer were dismissed, and she faces a court date in September.
Pritikin says a court will decide whether Funches gets future visitation with her sons.
"The safety and well-being of his children are (Wade's) main priority," Pritikin said. "Due to Ms. Funches' current unstable mental state, her visitation will be determined by the court. Mr. Wade continues to hope that one day he will have a civil relationship with his ex-wife for the sake of their sons."