ESPN’s Ed Werder is reporting that the Titans and Cowboys have finally agreed in principle on the terms of a trade that would give the Cowboys the rights to suspended cornerback Pacman Jones.

Per Werder, the Titans will receive the Cowboys’ fourth-round pick in this weekend’s draft. The Cowboys could also end up sending additional compensation to the Titans, depending on whether Jones is reinstated and, if he is, how much playing time he gets. Jones will sign a new contract with the Cowboys; he will pay $500,000 to a charity of the Titans’ choosing as part of a financial settlement with the Titans.

If Jones is still suspended a year from now, the Titans will send an undisclosed 2009 draft pick back to the Cowboys.

The big question is whether Jones will ever be allowed back in the league, and whether the revelation this week that he paid hush money to the man arrested for a strip club shooting will have any bearing on his reinstatement.

Asked about that yesterday, Cowboys owner Jerry Jones said, “I only know what I’ve read about that. Just take that on its face.”

UPDATE: The Titans have issued a statement confirming the trade, pending final details being worked out and Jones passing a physical.