The decision has put an end to the legal drama kicked up when Walker's mother petitioned to be her granddaughter's guardian, reported E!Online.
The two sides had actually reached an agreement barely a week after Cheryl Ann Walker first surprised Meadow, 15, and Soteros by filing for guardianship, but LA Superior Court Commissioner David Cowan refused to close the case pending an investigation into Meadow's home life.
An attorney for Cheryl said that his client had accepted the arrangement "in the absence of a better plan".