Peter launched legal action in 2009 after Katie said in two separate interviews that he had been unfaithful during their marriage.
The case came before a judge at London's High Court today and a lawyer for Price said that she has agreed to pay Andre an undisclosed sum of damages for the slur.
The 33-year-old also offered Andre, 38, an apology, which he accepted.
The Mysterious Girl hitmaker, who got divorced from the glamour model in 2009, reportedly plans to pay the money into a trust fund for Katie's disabled child Harvey, her son from a previous relationship.