Imus and CBS Radio "have mutually agreed to settle claims that each had against the other regarding the Imus radio program on CBS," the network and Imus' attorney Martin Garbus said in a joint statement Tuesday.
The terms of the settlement will not be disclosed, according to the statement. CBS and Garbus confirmed only that the settlement had been reached.
The settlement pre-empts the dismissed radio personality's threatened $120 million breach-of-contract lawsuit.
Meantime, Imus is talking to WABC-AM and other stations about making a possible comeback, a person familiar with the talks told The Associated Press. The person, who spoke on condition of anonymity because the details had not been announced, also said the deal with CBS calls for a "non-disparaging" agreement that forbids the parties from speaking negatively about each other.
The settlement and possible comeback come more than four months after Imus created an uproar over his racist and sexist comments about the Rutgers women's basketball team.
Just before his dismissal, Imus signed a five-year, $40 million contract to continue his nationally syndicated radio program, based at New York's WFAN-AM, which is owned by CBS Radio and a part of CBS Corp. Garbus, the famed First Amendment lawyer, said in May that Imus planned to sue CBS for $120 million in unpaid salary and damages.
Imus, 67, was dismissed April 12 after describing the Rutgers women's basketball team as "nappy-headed hos" on his show, also simulcast on MSNBC. (General Electric Co.'s cable TV channel now has the "Morning Joe" program with Joe Scarborough.)
Garbus had cited a contract clause in which CBS acknowledged that Imus' services were "unique, extraordinary, irreverent, intellectual, topical, controversial." The clause said Imus' programming was "desired by company and ... consistent with company rules and policy," according to Garbus.
Steve Borneman, general manager of WABC, did not return repeated calls requesting comment on whether Imus might join the New York talk-radio station that features political and topical shows with such stars Sean Hannity and Rush Limbaugh.
The Rev. Al Sharpton, who led the movement to get Imus fired, issued a statement saying the development is a "a legal matter between a former employer and employee."
But he added that it is "also a testimony to the movement of people that raised their voices to fire Imus that CBS would rather pay him off than keep him on. This shows the strength of our movement and we congratulate the leadership of CBS for not putting a few dollars above the integrity of the airwaves. To the rumors that Imus may resurface, wherever he resurfaces we at National Action Network and other groups will be watching and monitoring him."
WFAN also announced Tuesday that former pro quarterback Boomer Esiason is taking over the morning time slot along with Craig Carton.
As co-host of "The Jersey Guys," a talk show on New Jersey radio station WKXW-FM, Carton at times offended minorities and women.
In January 2005, then Gov. Richard Codey nearly came to blows with Carton over his and his co-host's disparaging comments about Mrs. Codey's widely publicized battle with postpartum depression.
That same year the two hosts apologized over disparaging remarks about Asian-Americans.
New Jersey Assemblyman Wilfredo Caraballo said that Carton is "a guy who's managed to insult almost every community around."
"You would have thought that after the Rutgers incident that a lesson would have been learned. But I guess they figured that this guy would get some ratings for them," he said.