In June, the British publication News of the World ran a story claiming that Mills McCartney once worked as a high-priced call girl.
She immediately issued a statement denying the claims, and her lawyers announced that she intends to sue to paper after her divorce.
Lawyers for the 38-year-old ex-model said the News of the World's claims were "untrue and highly defamatory".
"The interests of her daughter (Beatrice, 2) are of paramount concern,"a statement said. "She will defer issue of legal proceedings until the arrangements in relation to the divorce are concluded, but intends to sue at that stage all parties, including individuals, who are intent on damaging her reputation."
A friend of Heather's told Britain's The People newspaper: "Heather is
satisfied with the £10 million deal being discussed.
"She was only too aware that she could have gone into battle for a lot more.
But she is still devastated over the break-up and is not in any mood for a
bitter legal row."
The friend added: "She has no intention of putting up a fight. She is far
too upset to even think about going down that road."
Heather also hopes to keep the split amicable for the sake of the couple's
two-year-old daughter, Beatrice.
The pal revealed: "Heather and Paul have been in regular contact since they
split up in May.
"They have constantly reminded each other that Bea should always remain
their number one priority throughout the finalisation of their divorce."
Meanwhile, Sir Paul McCartney has assured former Beatles bandmate Ringo Starr that he is doing "fine" without Heather Mills.
The long-time friends had an emotional reunion at an after show party for the Las Vegas premiere of 'Love' - a production inspired by the Beatles' music.
An onlooker told Britain's Daily Mirror newspaper: "They threw their arms around each other it was lovely to see.
"Ringo asked him, 'Are you alright?' and Paul replied, 'I'm fine'. Ringo seemed really concerned and said 'Are you sure?' Paul smiled at him, touched his arm and said, 'I'll be all right'."