'X Factor' judge Louis Walsh has settled a €500,000 defamation action against News Group Newspapers in Ireland.
The out-of-court deal was reached after the music mogul sued The Sun over a story last year based on a false allegation that he sexually assaulted a man in a Dublin night-spot.
Unemployed dance teacher Leonard Watters was jailed for six months in July for wrongly accusing Walsh of groping him in a celebrity nightclub after a Westlife concert in April 2011.
Eoin McCullough, senior counsel for News Group Newspapers, read a statement to the High Court in Dublin apologising to Walsh.
“The Sun published an article in its editions of 23 June, 2011, in which we reported that Louis Walsh was being investigated in relation to a sexual assault on Leonard Watters,” he said.
“In fact it transpired that Leonard Watters had made a false statement to An Garda Siochana, and he has since been convicted in relation to this matter.
“The Sun fully accepts that the alleged assault did not occur in the first place and Louis Walsh is entirely innocent of any such assault.
“The Sun unreservedly apologies to Louis Walsh for any distress caused to him as a result of our article.”
Walsh took legal action against the Murdoch group for damages over the article published on June 23 2011 with the headline "Louis Probed Over 'Sex Attack' on Man in Loo".
The paper accepted the accusation was false but initially denied defamation, saying that it had acted fairly as the story was based on police inquiries in to the allegation.
Outside court, Walsh said he would not have wished what happened to him on his worst enemy.
"I'm very relieved," he said.
"This has had a terrible effect on me, guys. It was all lies.
"And I'm very satisfied with this total vindication for me, but I remain very angry at the treatment I received at the hands of The Sun."
Walsh's lawyer Paul Tweed confirmed his client would be paid damages of €500,000, along with his legal costs.
"This headline story should never have been published," Mr Tweed said.
"Although the person who fabricated the story has since been convicted in the criminal courts, this is a prime example of the serious damage that can be inflicted on an individual, whether they are well-known or not, by the publication of totally unfounded allegations which, in the age of the internet, can circumnavigate the globe in a matter of seconds.
"The serious consequences of worldwide dissemination online of a defamatory story is a fundamental problem which Lord (Justice) Leveson's report, to be published tomorrow in the UK, will hopefully address on the principle that prevention is always better than cure."
Mr Walsh said he felt vindicated by the settlement and said that the story had started with The Irish Sun.
"I have the utmost respect and time for most journalists with whom I've always enjoyed a good relationship," he said.
Walsh said he remained angry at the way he was treated by the paper.
"I am therefore absolutely gutted and traumatised that these allegations against me should have been published, particularly as I had made it clear at the time there was not one iota of truth in them, that I was totally bewildered as to who would have made up this type of story," he said.
"Although the perpetrator has since been convicted as a result of concocting the allegations this didn't stop the story being spread all around the world as a result of The Sun's headlines."
He added that while no amount of money would compensate him for what he had been through he was glad to have achieved a decisive and categorical settlement.