This was sent out by the team late Wednesday afternoon:

The City of Seattle has agreed to settle its lawsuit against the Professional Basketball Club, LLC after both parties reached an agreement that terminates PBC’s lease at KeyArena and allows the team to relocate immediately to Oklahoma City, PBC Chairman Clay Bennett announced today. The settlement agreement was signed by Bennett and Seattle Mayor Greg Nickels.

"We believe this is a fair and appropriate resolution to the litigation involving the Sonics and the City of Seattle. We are pleased that the uncertainty is lifted for our players, staff and Oklahoma City fans who can now make plans for the immediate future,” Bennett said.

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Here is NBA Commissioner David Stern's response to the settlement between the City of Seattle and the Seattle SuperSonics.

NEW YORK, July 2, 2008 – NBA Commissioner David Stern has issued the
following statement:

“We are pleased that the Sonics and the City of Seattle have settled their
litigation. While the decision has been made to relocate the Sonics to
Oklahoma City, the NBA continues to regard Seattle as a first-class NBA
city that is capable of serving as home for another NBA team. In order for
this to occur, a state-of-the-art NBA arena must be funded and constructed
in the Seattle area, a subject that has been extensively debated -- but not
ultimately acted upon -- by local political and business leaders over the
past four years. We are pleased that the City remains committed to
addressing this fundamental requirement for the return of NBA basketball to
Seattle and we hope that other elected officials critical to a solution
will support the City’s efforts.

“We understand that City, County, and State officials are currently
discussing a plan to substantially re-build KeyArena for the sum of $300
million. If this funding were authorized, we believe KeyArena could
properly be renovated into a facility that meets NBA standards relating to
revenue generation, fan amenities, team facilities, and the like. Assuming
the funding can be committed, the league is willing to work with the City
on the design and construction of the re-build to facilitate this result.
Under these circumstances, if an opportunity arose in the future for an NBA
team to be located in Seattle, we would support that team playing its home
games in a re-built KeyArena, if it wished. However, given the lead times
associated with any franchise acquisition or relocation and with a
construction project as complex as a KeyArena renovation, authorization of
the public funding needs to occur by the end of 2009 in order for there to
be any chance for the NBA to return to Seattle within the next five years.

“We are pleased that Steve Ballmer has expressed the continuing willingness
of his group, Seattle Center Investors, managed by Seattle developer Matt
Griffin, to be a part of the solution for returning NBA basketball to
Seattle. The NBA will keep SCI and the City informed if opportunities
arise in the next five years for franchise sale, relocation and/or
expansion. Under the circumstances outlined above, the NBA would be happy
to return to the City of Seattle.”

According to a source with knowledge of the situation a settlement has been reached between the City of Seattle and the Seattle SuperSonics ownership group, just hours before an expected announcement by U.S. District Court Judge Marsha Pechman. Details of the settlement were not immediately available.

According to the source, the two sides have been in talks for three weeks, and discussions heated up within the last few days. The City of Seattle is expected to make an announcement at 5 p.m. at City Hall. I'll have an update when more information becomes available.

KING-5 is reporting that Pechman will give her ruling at 4 p.m. even if the sides work out a settlement.