In addition to paying damages, the newspaper has promised to publish an apology to Henry after it wrongly claimed that she had been "grossly negligent" in the case.
At a hearing in the High Court the paper also accepted that there was no justification for the allegations.
The payout has been welcomed by the British Association of Social Workers (BASW), which said the reporting was indicative of a "media-led blame culture" surrounding the case.
Nushra Mansuri, BASW professional officer, said: "A horrific tragedy such as the Baby Peter case affects everyone, not just those directly involved and it helps absolutely no one for newspapers to print unjustified allegations about individual social workers working in extremely challenging situations.
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