Karen McDougal was paid £105,000 in August 2016 by tabloid news company American Media Inc (AMI), which owns the National Enquirer, for the rights to her story.
However, the story was never run and she was barred from speaking about it to anyone else.
Ms Clifford filed a lawsuit to release her from that contract and now a settlement has been reached that will entitle AMI to £53,000 of any future profits she makes from her story about the alleged affair.
AMI also allowed the model to keep the £105,000 she was paid in 2016.
Ms McDougal’s lawyers, Peter K. Stris, said of the settlement: ‘It’s a total win.
‘We got everything we were fighting for – she got out of the contract, gets the life rights back and owes AMI nothing more.’
Ms McDougal’s lawsuit claimed that AMI, whose chairman, David J Pecker, is a friend of President Trump, misled her into signing the contract – something the company denies.
The ex-Playboy Bunny has claimed that she embarked on an affair with the President when his son Barron with Melania was just a few months old.
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The President reportedly met Ms McDougal, who was voted runner-up for best Playmate of the ’90s, at a pool party at the Playboy Mansion in 2006.
At the time he had been married to third wife Melania for less than two years.
Ms McDougal claims that the businessman was so taken with her at the party that one Playboy exec told her: ‘I think you could be his next wife.’
A handwritten note by the model that was obtained by the New Yorker reveals that Trump allegedly offered her money after they had sex, and when she refused told her she was ‘special’.
She wrote: ’We talked for a couple hours – then, it was “ON”! We got naked and had sex.’ she wrote.
‘He offered me money. I looked at him (and felt sad) and said, “No thanks – I’m not ‘that girl.’
‘I slept w/you because I like you – NOT for money. He told me “you are special.”’
Ms McDougal said she currently had no plans to sell the rights to her story to a new buyer following the settlement with AMI.
She added: ‘It’s one step at a time for me. Today, I’m doing my victory dance.’
A White House spokesman has said of the allegations: ‘This is an old story that is just more fake news. The President says he never had a relationship with McDougal.’