Lawyers for Sayers, the immediate past president of the Carlton Football Club, read out the apology in the Victorian Supreme Court on Friday after indicating the settlement.
"I acknowledge the extreme hurt and harm caused to Cate Sayers by suggesting she posted or may have posted (the lewd photo)," barrister Sandip Mukerjea said on behalf of Mr Sayers.
"I accept she did not do this. To the extent I may have suggested otherwise, I apologise unreservedly to her."
Cate Sayers had claimed Mr Sayers had defamed her in a statutory declaration, which accused her of accessing his X account, posting a photograph of his genitalia in January 2025 and tagging a female executive at Bupa.
The document was sworn by Mr Sayers in the weeks after the controversial post, which was quickly deleted, as the AFL and Carlton conducted investigations.
In May, Mr Sayers, a former PwC chief executive, applied to have the case transferred to the Federal Circuit and Family Court of Australia where the matter would be heard in private.
But Justice Andrew Watson rejected the application in June, finding the Supreme Court was the more appropriate venue for a defamation claim.
The judge on Friday dismissed the proceedings and commended the parties for reaching the settlement, the terms of which were not discussed in open court.
"All litigation involves time, expense and risk," Justice Watson said.
"There was every reason to expect this proceeding would be no different."
Outside court, Cate Sayers said she accepted Mr Sayers' apology and the settlement closed a "painful and difficult chapter" for her.
"I commenced these proceedings to establish the truth, clearly and finally," she told reporters.
"With Luke's apology, I feel I have achieved what I set out to do."
She thanked the women who had supported her and said she hoped Friday's outcome gave them the strength to stand up for the truth.
Mrs Sayers, who said she wanted to move forward with her life, did not confirm whether the settlement included a monetary component.
Mr Sayers chaired the Carlton board from 2021 to 2025.
Before that, he headed consultancy firm PwC Australia between 2012 and 2020.
At an inquiry into a confidentiality and tax scandal in 2023, he apologised while stating he had no knowledge of it during his tenure.
"If the (tax office) had directly and formally advised me as the CEO of PwC Australia ... I would have sought details and ensured a full and thorough investigation," he said at the time.
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