The X Factor judge Louis Walsh has said he was satisfied to have been vindicated but still "very angry" at the way he had been treated by The Sun.
Speaking outside Dublin High Court, he said he was "absolutely gutted and traumatised that these allegations against me should have been published".
The lawyer for X Factor judge Louis Walsh has said that his client's case highlights a "fundamental problem" that he hopes Lord Justice Leveson's report will address.
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.
Louis Walsh's lawyer said after today's verdict that the story about his client "should never have been published".
Paul Tweed confirmed that Walsh would be paid damages of more than £400,000 along with his legal costs.
He added that the case highlights the "serious damage that can be inflicted on an individual ... by the publication of totally unfounded allegations which, in the age of the internet, can circumnavigate the globe in a matter of seconds."
Speaking outside Dublin High Court, Louis 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."
An apology addressed to Louis Walsh was read out on behalf of News Group Newspapers to the High Court in Dublin:
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.
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 apologises to Louis Walsh for any distress caused to him as a result of our article.
Louis Walsh won a defamation case against The Sun over a story last year based on a false allegation that he sexually assaulted a man in a Dublin night-spot.
Walsh took legal action against the publisher for damages over the article published on 23 June 2011 with the headline "Louis Probed Over 'Sex Attack' on Man in Loo".
The man who made the allegation - an unemployed dance teacher called Leonard Watters - was jailed for six months in July for wrongly accusing Walsh of groping him after a Westlife concert in April 2011.
The X Factor judge Louis Walsh has settled a 500,000 euro (£403,500) defamation action against Rupert Murdoch's News Group Newspapers out of court in Ireland over a story based on an unfounded sex assault allegation.
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The X Factor executive seen whispering in judge Louis Walsh's ear before singer Carolynne Poole's controversial exit has denied that the show is a fix.
Producer Richard Holloway was seen talking to Walsh just before the judges delivered their verdict on the ITV1 show which saw Louis force a deadlock.
Viewers accused the show of being a fix when the Irish judge initially appeared to save Poole, before backing eccentric singer Rylan Clark.
"We regularly chat to the judges during the show - they don't wear earpieces like (host) Dermot (O'Leary) so we have to speak to them throughout the programme, on anything from timings to running order changes," he said.
"On Sunday night I was telling Louis the order the judges would vote in and that he would be last."