Kanye West spent $4.5 million to buy the house next door to Kim Kardashian after she filed for divorce, and now he's decided to give it up in their settlement.

According to the divorce settlement, obtained by TMZ, Ye will transfer the title of the 3,650 square foot, 5 bedroom home to Kim -- and she'll now be responsible for all expenses related to the property. The home borders Kim's lot, so she'll likely just tear it down -- as it needs a ton of work -- and add to her acreage.

Remember, Kanye said he bought the house in order to be close to his kids, but the divorce settlement states they'll have equal access to the kids -- so he'll still be able to see them whenever he'd like.

The settlement also states Kanye will keep his $60 million home on the beach in Malibu, 2 ranches in Wyoming, 300 acres in Calabasas, a home in Belgium and his childhood home which he bought in Chicago.

Kim will retain property she owns in Idaho and of course, the $60 million Hidden Hills estate that she and the kids call home.

TMZ broke the story, Kim and Kanye were supposed to go to trial next month -- nearly two years after she first filed for divorce -- but hammered out a settlement Monday night. Kanye will pay $200k/month in child support and they'll split education and security expenses for the kids.