The news was confirmed by Kasparov on his own web site (http://www.clubkasparov.ru/ index0e.htm) where he reported that "...Yesterday evening [Saturday 5 June] the world champion signed a contract. The Indian grandmaster did it two days earlier."
It's believed that the two will play 16 games in October for what has been billed as "The Ultimate World Chess Championship", with a prize fund of $3m split two to one. The likely venue is Prague (where the two main forces behind the match - the Canadian entrepreneur Serge Grimaux and Dutch businessman Bessel Kok, a long-time chess lover - are based) though New York and London have been mentioned. Wherever, Kasparov must surely be favourite due to his excellent record against Anand, but it promises to be a splendid contest.
Meanwhile, we are less than two months away from the Fide knockout world championships in Las Vegas, with the opening ceremony scheduled for 30 July and the first round a day later. Somewhat irritatingly but far from unreasonably, the players' contracts stipulate that all who reach the quarter final stage or further are "precluded from playing in a world championship match not officially recognised by Fide".
Anand has thus decided not to compete, and it has been reported in the Las Vegas Review-Journal that the Fide world champion, himself, Anatoly Karpov, will also not play. Instead Karpov, who has already managed to get the event delayed from last December (and defeated Anand in January 1998 after being seeded straight through to the final while Anand played 23 games in under three weeks) is now threatening a lawsuit to block Las Vegas on the grounds that he wasn't consulted. No doubt he'd be happier if they simply designated him champion for life: printable words fail me!