The paper said the senior female employee was one of five members of staff who signed gagging orders after being bullied or harassed.
It reported a black male executive also received £1m after Sir Philip said he was “throwing spears in the jungle”.
The Topshop boss denies allegations he behaved wrongly.
Lawyers representing Sir Philip told the Telegraph that he was a “passionate businessman, who can at times be over-exuberant and hot-headed” and that he could be “perceived at times as aggressive with senior and trusted staff”.
Sir Philip’s lawyers added: “It is further denied that any of Sir Philip’s conduct towards employees amounted to any type of crime, or anything that would amount to gross misconduct, or a serious risk to health and safety.”
The billionaire had previously used an injunction to stop the paper from publishing the allegations.