A police officer had sold information about McFadden – who plays Phil Mitchell in the BBC drama EastEnders – to a News of the World journalist in 2010, Mr Justice Mann heard.
The actor had also been a target of voicemail interception by the same journalist, lawyers yesterday told a High Court hearing in London.
Two other celebrities had also accepted damages from News Group Newspapers – which published the NotW until it closed in 2011 – after taking legal action, the judge was told.
Interior designer Kelly Hoppen, the stepmother of actress Sienna Miller, had sued after evidence emerged that her voicemail messages had been intercepted, the judge heard.
Model Keeley Hazell had complained that her messages were targeted. “For years, false and private information about me has appeared in the press,” said McFadden outside court.
He added: “Although I am pleased to finally understand how some of this information came to be published, I am particularly concerned that a police officer sold my privacy to a tabloid newspaper for profit.
“I consider the payment of damages and public apology will go some way to ensuring respect for my and others’ privacy in future. I am glad to have been vindicated and to be able to put this matter behind me.”
His solicitor, Tamsin Allen, added: “This is a case where there was no possible public interest in the sale of this information.
“An officer failed in his duty to the public by seeking a private profit from a newspaper that was prepared to corrupt a public servant. This was the reality of journalism at the News of the World.”
Ms Allen had told the judge that police “raided” McFadden’s home in March 2010 to “search for guns”.
She said the raid followed a “false allegation” made by McFadden’s former partner and “no guns were found”.
She said that in the same month, police officer Sam Azouelos had sold private information about McFadden to NotW journalist Dan Evans.
McFadden alleged that as a result, an article written by Mr Evans had appeared in the newspaper containing detail of the raid and other “private information”.
Ms Allen said Mr Evans had admitted paying £750 to Mr Azouelos, while Mr Azouelos had admitted misconduct in public office.
She said McFadden had sued News Group and the Metropolitan Police for “misuse of private information”.
Ms Allen told the judge that News Group and the Metropolitan Police had agreed to pay McFadden “substantial damages” plus his legal costs.
Lawyers for News Group and the Metropolitan Police offered “sincere apologies” to McFadden.