Mr Cage also received undisclosed damages from the publishers of the Daily Mail's online edition.
Cage, who won a Best Actor Oscar for his role in Leaving Las Vegas, sued over a story published last month.
The article centred on how late he was in returning rented DVDs but the actor issued proceedings over other claims.
Paul Tweed, senior partner in Johnsons Law, has represented a string of stars including Harrison Ford, Britney Spears and Jennifer Lopez.
He confirmed a settlement has now been reached within a month of taking action on behalf of Cage, famous for his roles in Ghostrider, Bad Lieutenant, Con Air, National Treasure and The Rock.
He said: "My client has secured a complete vindication of his reputation following the publication of a categoric retraction by the MailOnline for what they immediately acknowledged was a completely unfounded and defamatory allegation of tax evasion.
"While my client acknowledges the MailOnline's prompt apology, which was one of the quickest that I have negotiated in recent times, together with the payment of undisclosed damages and his legal costs, he nonetheless remains very concerned that such a false and outrageous headline should have been published in the first place."
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