As you know ... the 2 were locked in a battle royale ... restraining orders, vicious accusations and a lot of bad blood.

But in a joint statement that will soon be released and obtained by TMZ, Paul and Adrienne say, "We're happy to announce we have reached agreement on a settlement," adding they are both pleased.

They go on, "There has been so much untrue negative innuendo and destructive rumors beyond our control ..."

In the statement, which we got from their rep, Jim Yeager, Adrienne and Paul say, "We want the best for each other and we're confident we can help each other make a continuing positive impact with our children."

They go on, "Our goal is for our children to have stable and nurturing relationships with both of us so we can all find as much happiness as possible."