In this May 19, 2012, file photo, Los Angeles Clippers...

In this May 19, 2012, file photo, Los Angeles Clippers owner Donald Sterling, left, and his wife, Rochelle, watch during the second half in Game 3 of an NBA basketball playoffs Western Conference semifinal against the San Antonio Spurs in Los Angeles. Credit: AP

Hours after a lawyer for Donald Sterling announced that Sterling was suing the NBA for $1 billion, the league issued a news release Friday saying it had approved the sale of Sterling's Los Angeles Clippers to former Microsoft CEO Steve Ballmer.

The NBA has canceled Tuesday's hearing to terminate the Sterling family's ownership of the team and said its Board of Governors will proceed with a vote to formally approve Ballmer's $2 billion bid for the team.

Sterling's estranged wife, Shelly, had been pushing to get the sale done before the meeting, which would have terminated both her and her husband's ownership in the team. The NBA released a statement Friday evening saying it has "resolved its dispute with Shelly and the Sterling family trust." As part of the agreement, the release said Shelly Sterling and the trust had agreed not to sue the NBA and agreed "to indemnify the NBA against lawsuits from others, including from Donald Sterling."

It was not clear last night whether that meant that Donald Sterling would be dropping his lawsuit.

"We're analyzing this," Donald Sterling's lawyer Max Blecher wrote in an email to Newsday yesterday.

Earlier in the day, Blecher said that Sterling would seek damages from the league for punishments and fines levied against him by NBA commissioner Adam Silver.

A suit was filed by Sterling's attorneys Friday in U.S. District Court in Los Angeles, alleging that the league violated Sterling's constitutional rights by relying on information from an "illegal" recording that publicized racist remarks he made to a girlfriend. It also says the league committed a breach of contract by fining Sterling $2.5 million and violated antitrust laws by forcing a sale.

Friday's developments were just the latest twist in the bizarre saga of the Clippers owner, who was thrust into the headlines after the website published an audio recording of him making racist comments to his female companion.

With the league's players threatening to strike and sponsors fleeing, Silver banned Sterling from the league for life last month and fined him $2.5 million. Silver also said he would ask the rest of the league owners to vote to force Sterling to sell the team. With the acceptance of Ballmer's bid, the vote is no longer deemed necessary.

Sterling has repeatedly vowed to fight the NBA's attempts to make him sell the team.

Sterling was stripped of his ability to act as a trustee of the family's fortunes, including the Clippers, after two neurologists determined he was suffering from dementia earlier this month, a person close to the Sterling family told The Associated Press.

The individual, who is familiar with the trust and the medical evaluations but wasn't authorized to speak publicly, said Sterling was deemed "mentally incapacitated" according to the trust's conditions because he showed "an inability to conduct business affairs in a reasonable and normal manner."

Blecher took issue with the reports that Sterling is suffering from Alzheimer's disease.

"We don't believe he does," Blecher wrote.

Shelly Sterling selected Ballmer's bid over reported bids of $1.6 billion by David Geffen and members of the Guggenheim Group, which own the Los Angeles Dodgers; and $1.2 billion by a group that included former NBA player Grant Hill and Los Angeles investors Tony Ressler and Bruce Karsh.

With AP

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