His solicitor, Gerard Tyrrell, told Mr Justice Eady the article was accompanied by a fax from the Park Lane Marriott Hotel which it claimed was "confirmation of a hotel reservation in London for the Liverpool captain".
The magazine had not contacted Gerrard or his agents before publication of the story, which had caused the player and his family considerable embarrassment and distress.
"The true position is that Steven Gerrard has not been involved in breach of FA rules in secret talks with Real Madrid or indeed any other football club relating to a possible move. He is more than happy at Liverpool to whom he is contracted."
Publisher Sport Media & Strategy Ltd accepted the allegations were false and apologised to Gerrard.
It agreed to pay him damages and his legal costs.