Both sides announced an out-of-court settlement, reports CBS Evening News Anchor Katie Couric.
In a statement, Vicki Iseman said The Times admitted the article, "was not intended to convey that I had engaged in inappropriate behavior."
The Times says it did not apologize to Iseman, but she told CBS News that's not so, Couric reports.
According to the U.S. District Court, attorneys for Iseman filed a notice of voluntary dismissal of the December legal action, presumably after the settlement was reached.
The story in question appeared in the paper almost exactly a year ago, when McCain was out on the campaign trail. The piece, written by four veteran Times' reporters, was about McCain's first campaign for President in 2000 and the chummy appearance the candidate displayed with the lobbyist.
The story clearly stated that the Senator and Iseman both denied having a romantic relationship – but also suggests that key players within McCain's campaign were concerned about how close their candidate had become with the lobbyist.
4572570The Times' reported that "to his advisers, even the appearance of a close bond with a lobbyist whose clients often had business before the Senate committee Mr. McCain led threatened the story of redemption and rectitude that defined his political identity."
The Times' executive editor, Bill Keller, said Thursday in a statement that the Times stood by its story, which he said did not allege an affair or unethical behavior on Iseman's part.