Cage took action against Turner after she alleged he was arrested twice for drunk-driving while they were making the 1986 film Peggy Sue Got Married.
Turner also alleged he was arrested for stealing a Chihuahua.
Cage accused Turner of "defamation, libel and slander" by including the allegations in her recent book, Send Yourself Roses: My Life, Love and Leading Roles.
The action was brought in the UK because an extract of Turner's book was reprinted in the Daily Mail and on its website.
'Gratified'
Cage's UK solicitor Simon Smith said the Oscar-winning actor was "extremely pleased" with the outcome of the case "since he has never been arrested for drink driving, dog theft or anything else".
"As an actor who stars in many family-friendly films and who has a young child and teenager of his own, Mr Cage was understandably upset at having been wrongly depicted as condoning that sort of reckless, dangerous and criminal behaviour."
The actor, he continued, was "gratified that the defendants have done the right thing by acknowledging their errors and making amends".
The donation will be made to the National Adult Protective Services Foundation, a US charity which benefits vulnerable adults.
The Daily Mail has agreed to publish an apology and remove the article from its website.
Headline has also agreed to insert a correction and apology into copies of Turner's book.
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