LONDON—The U.K.’s Daily Mail newspaper said Wednesday it agreed to pay damages to U.S. First Lady Melania Trump to settle two lawsuits brought in the U.S. and U.K. after it republished allegations that she “provided services beyond simply modeling” when working as a model in the 1990s.

The Daily Mail and its Mail Online website said in a statement that it accepts the allegations it published in a 2016 article are “not true” and apologized for the distress the article caused.

A person familiar with the settlement said the newspaper agreed to pay the first lady $2.9 million in damages and legal costs to settle both lawsuits.

In an Aug. 20, 2016, article entitled “Racy Photos, and Troubling Questions About His Wife’s Past that Could Derail Trump,” the Daily Mail and its online edition published allegations the newspaper said were originally made in a Slovenian magazine that a modeling agency in Milan where Mrs. Trump had worked allegedly operated as an escort agency.

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