The police have paid "an unprecedented sum of damages" to The Sunday Times's Northern Ireland editor and his wife.
The couple wrote an unauthorised biography on Martin McGuinness
The couple launched legal action following a PSNI raid on their home.
The case against the PSNI was taken by journalists Liam Clarke and Kathryn Johnston and was settled out of court over the weekend.
The May 2003 raid came after published transcripts of conversations between Sinn Fein's Martin McGuinness and senior government officials.
The couple launched the legal action against the PSNI on the grounds that the wrong type of warrant was used to gain entry to their home, making their five-hour detention unlawful.
On Monday, a barrister acting on behalf of the couple told Belfast High Court judge Mr Justice Higgins the case had been settled.
He said the PSNI had agreed to pay the couple's court costs as well as undisclosed damages.
Speaking after the case was settled, Mr Clarke and Ms Johnston said that during the raid on their home, the police "tore up the rule book and rode rough-shod over the limited protection afforded to journalists".
The raid on the couple's home in Ballymena, County Antrim, was carried out under the Official Secrets Act.
The case was referred to Ombudsman Nuala O'Loan
The couple wrote an unauthorised biography on Martin McGuinness entitled 'From Guns to Government'.
It included transcripts of alleged conversations between the MP and government officials which indicated phone-tapping.
Neither Mr Clarke nor Ms Johnston were ever charged with an offence and following the incident, they made a complaint to the Police Ombudsman's office.
Following an investigation, Nuala O'Loan branded the raid as "poorly led and unprofessional" and suggested several of the officers involved should be disciplined.