She was described as a "modern day Joan of Arc" for taking on a paper she claimed portrayed her as a prostitute who was deluded for believing her boyfriend was innocent of murder.
Now, after more than two days of testimony, Rachelle Louise has settled the case, with her barrister saying the paper had incorrectly reported she worked as a stripper.
Speaking outside Sydney's District Court on Friday, Ms Louise told reporters she could not go into the details as to the settlement but added: "I am ecstatic with the result."
"This is the first hurdle of many. Now that I have cleared my name, I can clear Simon's."
The 25-year-old law student launched legal action against Nationwide News, alleging The Daily Telegraph defamed her in articles written after her then boyfriend Simon Gittany was found guilty in November 2013 of murdering his fiancee Lisa Harnum.
The court heard how Ms Louise felt humiliated by the coverage, with her barrister Clive Evatt describing an article by reporter Clementine Cuneo as the "worst example of gutter journalism".
He said a claim that she did occasional work at Spearmint Rhino gentleman's club in Las Vegas was simply not true.
Describing her as a "modern day Joan of Arc", Mr Evatt said Ms Louise "has plenty of guts, she stands up to the press, to Nationwide News, to the courts".
When Ms Louise took the stand she described being "accosted" by people asking if she was a prostitute or a stripper.
She also denied the paper's statements that she was an aspiring actress and model.
But when the publisher's barrister Matthew Collins QC began his cross-examination of her this week, he pointed to a photograph taken by a modelling agency.
Ms Louise replied it was not modelling, but "promotional work".
Dr Collins later directed her to an article written by Ms Cuneo on October 24, 2013 that Ms Louise had not objected to.
In Facebook messages sent between the two women on the day before it was published, Ms Cuneo explains the story will "basically" be about "the glamorous woman accompanying Simon to court each day" and how she was a model and actor who once starred in the television show Underbelly.
Ms Louise responds: "Did you use a picture of me from the page? I hope it's one I like lol! xx."
Dr Collins questioned why she did not say then that the paper had "got it all wrong".
Nationwide News claimed truth as a defence for many of the accusations made against it.
In announcing the settlement in court on Friday, Mr Evatt said "between November 2013 and February 2014 the Daily Telegraph reported that Rachelle Louise had previously worked as a stripper. This was incorrect."
Each party will pay their own costs.
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