The singer, who has been under a conservatorship since 2008 after her public meltdown, received approval from a judge on Thursday to sign a contract with the reality television show, reports Radar Online.
Shortly before Spears's meeting with Judge Reva Goetz, an apparent insider said: "Britney's team is almost ready to sign the contract for her to become a judge on X Factor.
"Before the contract is signed, the lawyers needed to get approval from Judge Reva Goetz, as all business transactions, contracts, etc, need to get formal approval.
"Judge Goetz wanted to talk to Britney in person to make sure this is something that she wanted to do, and that she was capable of doing."
Goetz was said to be very impressed with Spears and signed off the deal.
The source added: "Under terms of the contract, Britney will be paid around $15 million (£9.5m) a year. She will travel out of state for auditions, as long as it doesn't interfere with her custodial time with her sons.
"The boys will be allowed to come to the set whenever Britney wants them there. Her sons are her number one priority. [Fiancé] Jason [Trawick] has been heavily involved in the contract talks."
The report claims that a formal announcement about Spears joining The X Factor USA will be made in the next two weeks.
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Watch the video for Britney Spears's 'Till The World Ends' below: