Kevin Costner, Estranged Wife Christine Baumgartner Settle Divorce

It may be the most shocking turn of events this year ... the divorce war between Kevin Costner and Christine Baumgartner is now history, because they have SETTLED UP!!!

As improbable as a settlement seemed, there were signs it might happen. As we reported, Kevin's legal team, headed up by disso queen Laura Wasser, won a series of legal skirmishes, particularly in the child support department. Wasser submitted paperwork to the court saying Kevin's monthly obligation should be $63k a month. Christine wanted $248k a month, and after a 2-day evidentiary hearing in Santa Barbara earlier this month, Judge Thomas Anderle sided with Kevin.

The judge also made it pretty clear ... the prenup would be enforced, and if Christine challenged it she would have to repay Kevin more than $1 million and pay his attorney's fees for the prenup fight. Apparently, Christine saw the handwriting on the wall and agreed over the weekend to the terms of a 3-page settlement letter.

The 2 were married for 18 years and had 3 kids together. Christine filed for divorce back in May and asked for joint custody. Kevin also asked for joint custody. We don't know the details of the settlement, but it looks like Christine's $850,000 fee request is off the table.

Although the prenup is enforceable, our sources say Christine got more than what was prescribed in the doc ... for the sake of settlement.

Did not see this one coming.