Although Mr Porter was not named in the ABC article, his legal team argued that readers could still identify him.
Mr Porter subsequently revealed the article was about him during a press conference in which he strenuously denied the allegations.
The ABC and Mr Porter announced on Monday afternoon that the defamation action had been discontinued. The ABC did not pay any damages to Mr Porter but did pay mediation costs.
Michael Bradley, a lawyer who represented the alleged rape victim, said an independent inquiry remained necessary to further investigate the allegations.
“Nothing has changed from where we started,” Mr Bradley told SBS News.
“Mr Porter is still a cabinet minister - there has been no legal process to look into the serious allegations which are still hanging over him.”
The ABC has updated its online article with a statement stating it "regretted" that "some readers misinterpreted the article as an accusation of guilt against Mr Porter."
But it has insisted it does not regret the article and "still does not accept that the article suggested guilt" - after Mr Porter attempted tocategorise the move as a "humiliating backdown".
Mr Porter on Monday also addressed renewed calls for an independent inquiry.
“People will call for an inquiry or they won’t call for an inquiry,” Mr Porter told reporters on Monday.
“The things that were alleged to have happened just didn’t happen.”
Prime Minister Scott Morrison has previously rejected the prospect of an independent inquiry, describing Mr Porter as an “innocent man under our law”.
The woman behind the allegations took her own life last year and though she wrote down her claims in writing - did not make a formal statement to police.
NSW Police have chosen not to pursue the case against Mr Porter, saying the allegations did not provide enough admissible evidence to proceed.
Labor’s shadow attorney general Mark Dreyfus told reporters the allegations must be dealt with through an independent inquiry and can’t simply be ignored by Mr Morrison.
“There must now be an independent investigation to ensure Christian Porter is fit to continue to serve as a federal cabinet minister,” he told reporters in Canberra.
“These allegations have not been dealt with, they have not been investigated, the matter simply can’t be brushed away by Mr Morrison.”
Greens Leader Adam Bandt has also thrown his support behind an independent inquiry.
“The prime minister must conduct an independent inquiry into the full circumstances surrounding these very serious allegations,” he told reporters.
“It is up to the prime minister to determine whether or not there is a spot in his cabinet for someone who has very serious accusations made against them.”
The Greens have announced they will attempt to pursue a bill to establish such an independent inquiry when the Senate returns in June.