Kelsey and Camille Grammer Reach Amicable Custody Agreement

02/28/2012 at 06:00 PM EST

Kelsey and Camille Grammer Reach Custody Agreement
From left: Camille Grammer, Kelsey Grammer and Kayte Walsh
Albert Michael/Startraks; Splash News Online
It sounds like one of Hollywood's most contentious custody battles is taking a turn for the better.

A source confirms to PEOPLE that Real Housewives of Beverly Hills star Camille Grammer, 43, and her ex-husband Kelsey, 57, have finally reached an amicable settlement in the case involving their two young children Mason and Jude.

The two kids will stay in California with their mother, while Kelsey will be closely involved, according to the source, who also says a financial settlement is close to being reached.

Kelsey, who is currently expecting twins with new wife Kayte Walsh, filed for sole custody of his and Camille's children last May, almost a year after Camille filed for divorce.

The actor is currently looking for a home in the Los Angeles area so he can have a presence and be involved in his kids' lives, the source says.

Kelsey and Camille's reps had no comment.

TMZ was first to report the custody agreement.

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