The National Basketball Association said on Friday that it has reached an agreement with the estranged wife of Los Angeles Clippers owner Donald Sterling to sell the team, opening a new chapter for the franchise after 33 years under Sterling.
Sterling, 80, was banned for life by the NBA for racist remarks in a private conversation that were recorded secretly and leaked to the media while the Clippers were playing in the NBA playoffs. The news brought shame on the league, sponsors cut ties with the team and players considered a boycott.
Read More The L.A. Clippers and Mrs. Sterling
Also on Friday, Sterling sued the NBA and league Commissioner Adam Silver in U.S. District Court in Los Angeles for at least $1 billion.
As a result of the settlement, the league canceled its Tuesday hearing to terminate Sterling's ownership, avoiding a vote by NBA owners to consider removing one of their own.
In his lawsuit, Sterling says he was unaware he was being recorded and was caught in a jealous quarrel with a "lover." He alleges Silver and the NBA forced him to sell the Clippers using a recording illegal under California law as evidence.
Sterling also says in the suit the NBA did not respond to his query on Friday if the hearing had been canceled following the sale of the Clippers.
NBA executive vice president and general counsel Rick Buchanan called Sterling's lawsuit baseless and said Sterling did not have any recourse since his wife had sold the team.
Read MoreSterling says NBA ban, forced sale is illegal: LA Times
"There was no 'forced sale' of his team by the NBA - which means his antitrust and conversion claims are completely invalid," Buchanan said in a statement.