Lord McAlpine has reached a £125,000 settlement with ITV and Phillip Schofield over a This Morning show in which a list of alleged paedophiles was shown to the Prime Minister.
During the show, presenter Schofield handed a piece of paper to David Cameron saying it was a list of senior Tories who were being linked on the internet to a paedophile ring.
Schofield briefly showed the names to viewers as he handed over the list and asked the Prime Minister if he would investigate them.
In a statement, the broadcaster said: "ITV and Phillip Schofield have now reached agreement with Lord McAlpine to settle his libel claim, made in relation to the This Morning programme broadcast on November 8, 2012.
"ITV and Phillip Schofield apologise unreservedly to Lord McAlpine, have agreed the terms of a statement to be made in open court, and have agreed to pay him damages of £125,000 and his legal costs."
Earlier this week lawyers for Lord McAlpine had said that he was seeking a larger payout from ITV than the £185,000 settlement he agreed with the BBC.
Speaking to The Times newspaper, his spokesman said: "This was also done in broad daylight in a premeditated way in front of the Prime Minister. It was that programme that prompted Lord McAlpine to come out with his statement."
Lawyers had made clear ahead of the BBC settlement last week that they were mindful of the effect on the licence payer and had "tempered" their demands accordingly.
Lord McAlpine said the damage "can't be repaired" But Lord McAlpine's solicitor Andrew Reid told BBC Radio 4's The World At One: "It is a pragmatic settlement.
"I think we accepted the legal argument that the Newsnight programme had effectively set the pot boiling at that point and the Schofield stunt added fuel to the fire that was already there, and we had to take that into account.
"It was listening to sensible legal argument."
Action is also being considered against a "very long list" of Twitter users who wrongly named the former Tory politician, thought to include comedian Alan Davies and the Commons Speaker's wife Sally Bercow.
Lord McAlpine has asked those who linked him to child abuse allegations to apologise formally and pay a "sensible and modest amount", which he plans to donate to BBC Children in Need.
The politician was mistakenly implicated by Newsnight's November 2 broadcast in a paedophile ring that targeted children at the care home in Wrexham.
It did not name him, but Lord McAlpine was later identified on social media.
The peer said the damage of the Newsnight report "can't be repaired" and he now has to live with the legacy of suspicion.
Newsnight carried a full, on-air apology for the broadcast a week later.
An official report by the BBC's Scotland director Ken MacQuarrie into the botched investigation concluded that Newsnight staff had failed to complete "basic journalistic checks".
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