LAS VEGAS -- Floyd Mayweather Jr. and Manny Pacquiao are settling a federal defamation case in Las Vegas, clearing a key hurdle to a long-awaited bout between two top fighters who've traded verbal jabs for years but have never met in the ring.

Terms of the pretrial agreement cited in documents filed Tuesday in U.S. District Court in Las Vegas are confidential, said Malcolm LaVergne, a lawyer representing Floyd Mayweather Jr.'s father in the case.

LaVergne said documents filed under seal ask U.S. District Judge Larry R. Hicks to dismiss the lawsuit. Documents filed publicly said each side would bear its own attorney fees and costs.

"The matter has been resolved," LaVergne said. "Any alleged terms of the resolution would be strictly confidential. Floyd Mayweather Sr. is very happy that this lengthy case has finally come to a conclusion."

Pacquiao filed the lawsuit in December 2009 seeking unspecified damages based on allegations that Floyd Mayweather Jr. defamed him by suggesting Pacquiao used performance-enhancing substances. Pacquiao denied Mayweather's claim.

In a statement released Tuesday night through the mediator in the case, the Mayweathers said they "wish to make it clear that they never intended to claim that Manny Pacquiao has used or is using any performance enhancing drugs, nor are they aware of any evidence that Manny Pacquiao has used performance enhancing drugs."

An attorney for Pacquiao did not immediately respond to messages from The Associated Press.

The direction of the case took a turn against Floyd Mayweather Jr. last week, when the judge issued a ruling ordering him to pay about $114,000 in legal fees and costs for avoiding questioning under oath from Pacquiao's lawyers.

Hicks faulted Mayweather for failure to comply with a court order. But he earlier rejected a bid by Pacquiao lawyers Daniel Petrocelli and David Marroso to end the lawsuit with a more severe sanction – a default judgment for Pacquiao.

LaVergne said Tuesday he had no information about whether the court settlement means Mayweather and Pacquiao will meet in the ring.

Pacquiao's promoter, Bob Arum of Top Rank Inc., declined comment. His spokesman, Lee Samuels, said the company was not involved in the defamation case.

Nevada State Athletic Commission chief Keith Kizer said he wasn't aware of any talks between the two camps about scheduling a fight. But Kizer said such a fight could set records for the highest purse, gate and number of cable television paid viewers.

A Mayweather-Pacquiao fight might eclipse the Mayweather super welterweight fight against Oscar De La Hoya that drew 17,078 fans to the MGM Grand Garden Arena in May 2007, Kizer said. Paid attendance was $18.4 million.

"Based on my dealings with the boxing public and boxing insiders, the proposed Mayweather-Pacquiao fight has as much interest as any fight I can remember in the last 20 years," Kizer said. "I think this would be our first gate over $20 million."

Pacquiao, 33, who is also a member of Congress in the Philippines, is 54-4 with two draws in 60 fights. He is due to fight Juan Manuel Marquez on Dec. 8 at the MGM Grand Garden.

Mayweather, 35, who goes by the nickname "Money," was serving two months of a three-month sentence in a Las Vegas jail on a domestic battery conviction when he was named by Forbes magazine this summer as the highest-paid athlete in the world for 2011.

He is undefeated in 43 fights and was guaranteed $32 million for the May 5 bout during which he defeated Miguel Cotto.

Also on HuffPost:

Loading Slideshow...
  • Mayweather vs. Apodaca - October 11, 1996 (Professional Debut)

    Olympic medalist Floyd Mayweather of Grand Rapids, Mich., right, lands a right to the face of Roberto Apodaca of El Centro, Calif., during their super featherweight fight at Texas Station in Las Vegas. Mayweather scored a knockout at 37 seconds of the second round. (AP Photo/Lennox McLendon)

  • Mayweather vs. Gerena - September 11, 1999

    Carlos Gerena, left, of Puerto Rico mixes it up with Floyd Mayweather Jr. of Grand Rapids, Mich., during the WBC super featherweight title fight in Las Vegas. Mayweather retained his title when referee Richard Steele, on advice of a ringside physician, stopped the fight after the seventh round. (AP Photo/Lori Cain)

  • Mayweather vs. Corrales - January 20, 2001

    Floyd Mayweather, left, of Grand Rapids, Mich., stands in the ring with his father, Floyd Mayweather Sr., after defeating Diego Corrales of Sacramento, Calif., in their WBC super featherweight championship fight in Las Vegas. Prior to the bout, both Mayweather and Corrales were undefeated. (AP Photo/Eric Risberg)

  • Mayweather vs. Castillo II - December 7, 2002 (Rematch)

    Floyd Mayweather lands a left to Jose Luis Castillo of Mexico during their WBC lightweight fight at Mandalay Bay Resort in Las Vegas. Due to the closeness of their first bout, Mayweather accepted a rematch, citing the rotator cuff injury to his left shoulder -- which he sustained during training two days before the original match -- as a hindrance the first time. (AP Photo/Laura Rauch)

  • Mayweather vs. Gatti - June 25, 2005

    Floyd Mayweather Jr., right, of Las Vegas, Nev., hits Arturo Gatti of Jersey City, N. J. in second round action of their WBO world super lightweight championship bout at Atlantic City's Boardwalk Hall. Gatti's corner stopped the fight after round six, giving Mayweather his third world title. (AP Photo/Mel Evans)

  • Mayweather vs. De La Hoya - May 5, 2007

    Floyd Mayweather Jr., right, throws a right at Oscar De La Hoya, during the fifth round of their WBC super welterweight world championship boxing match at the MGM Grand Garden Arena in Las Vegas. The Mayweather-De La Hoya bout set the record for most PPV buys for a boxing match with 2.7 million households, shattering the record of 1.95 million for Evander Holyfield-Mike Tyson II. (AP Photo/Eric Jamison)

  • Mayweather vs. Hatton - December 8, 2007 (Retirement)

    Mayweather celebrates after defeating Hatton in the WBC welterweight boxing title fight at the MGM Grand hotel-casino in Las Vegas. Mayweather congratulated Hatton afterward, calling him the most difficult fighter he'd faced. Shortly after, Mayweather announced his retirement and expressed his interest in becoming a promoter. (AP Photo/Isaac Brekken)

  • Mayweather vs. Márquez - Sept. 19, 2009 (Comeback)

    Floyd Mayweather Jr., right, and Juan Manuel Marquez, of Mexico, during their non-title welterweight fight in Las Vegas. On May 2, 2009, it was confirmed that Mayweather was coming out of a 21-month retirement to fight <em>The Ring</em> Lightweight Champion Juan Manuel Márquez. The fight marked only the fifth time in boxing history that a non-heavyweight fight sold more than 1 million pay-per-views, with the official HBO numbers coming in at over 1 million buys; and equalling a total of approximately $52 million. (AP Photo/Rick Bowmer)

  • Mayweather vs. Ortiz - September 17, 2011 (Larry Merchant Incident)

    Floyd Mayweather delivered a controversial knockout punch to Victor Ortiz during the fourth round of the WBC welterweight title fight in Las Vegas. Although Mayweather's victory was generally accepted as legal, it was also labelled as unsportsmanlike, as Larry Merchant reminds him after the match. Mayweather responded with a barrage of disrespectful comments before exiting the ring.

  • Mayweather vs. Cotto - May 5, 2012

    Boxers Floyd Mayweather, left, and Miguel Cotto face-off during a news conference in New York, Tuesday, Feb. 28, 2012. Cotto and Mayweather will fight in Las Vegas on May 5, 2012 for Cotto's WBA World super welterweight title. (AP Photo/Seth Wenig).