Alba was upset because she had not agreed to be on the cover and she worried it may have led readers to believe she appears nude or partially nude in the magazine.
"I appreciate Mr. Hefner's acknowledgment of the distress caused by Playboy's actions, and I'm happy to put this unfortunate event behind me," Alba said in a statement Tuesday. "This was never about money, it was about setting the record straight about something that was done without my knowledge or consent."
Playboy also made donations to two charities Alba supports. Her spokesman, Brad Cafarelli, declined to disclose the amount donated to Keep A Child Alive and Until There's A Cure.
"Hef felt bad that Jessica was upset and apologized for unintentionally hurting her feelings. We're happy the matter has been amicably resolved," said Playboy spokeswoman Lauren Malone.
On the March cover, Alba was shown in a bikini next to the headline "25 Sexiest Celebrities." Alba's attorneys told Playboy the magazine used the photo meant to promote the movie "Into the Blue" without her consent.