The judge said the two are working out the dispute on their own, but neither Walsh or his ex-wife have revealed the details of that agreement.
Laura Walsh accused the Tea Party congressman of not paying child support and said he owed her more than $117,000.
In an exclusive interview with ABC 7, Walsh says he is pleased to have the issue behind him.
"I can now say that both my ex-wife and I agree now that I am and never ever was a deadbeat dad," said Walsh. "For my kids, for my ex, for me, this is one good day. I will sleep tonight."
The congressman would not reveal the terms of the agreement but instead talked about why he would talk about the issue for the past 16 months.
"It was awful tempting to say ... here is my side of the story, but that wasn't the way to do it because that would have hurt my kids," he said.
Walsh's opponent in November's election is Tammy Duckworth. Her campaign issued a statement Thursday saying, "Joe Walsh has repeatedly failed to meet his responsibilities. Walsh's claim that he is not a deadbeat just does not square with the fact that he repeatedly does not pay his taxes or his bills on time."
"I found it utterly void of any grace, any class. I am so disappointed," he said. "If Tammy Duckworth and her team of Axelrod and Rahm Emanuel wants seven months to be about Joe Walsh's personal issues, bring it on."