In 'Beauty and the Beast', due to be released on Wednesday, Argentinian-born Iacub says she had a relationship with Strauss-Kahn from January to August 2012, in the midst of the scandal over accusations that he sexually assaulted a New York hotel maid the previous year.
Strauss-Kahn told the court earlier that the work was "despicable and false" and had wreaked "havoc" on his personal life. He said Iacub's aim was simply to make money with a book that targeted a man "who is already down on the ground".
Strauss-Kahn had sued Iacub and her publisher, Stock, for an attack on his private life and to prevent the book from going on sale.
The court rejected the demand for a ban but upheld the other plea for every copy of the book to carry an insert - a move which will certainly delay the launch.
Strauss-Kahn's lawyers Richard Malka and Jean Veil have not specified what they want it to say.
The 63-year-old Strauss-Kahn also sought €100,000 ($132,300) in damages and compensation from Iacub and Stock, and a similar amount from magazine Le Nouvel Observateur, which carried excerpts from the work.
'Set up and a trap'
The court ordered the magazine to pay €25,000 in damages and to publish the fact that it had been fined. Veil had told the court his client was the victim of a "set-up" and a "trap".
Commenting on the ruling, Strauss-Kahn's lawyer Malka said it was "an excellent ruling for Strauss-Kahn and above all for principles, for the respect of one's private life".
The book touches on the incident in New York and cases in France against Strauss-Kahn, as well as his relationship with Anne Sinclair, his fabulously rich wife of 20 years who announced last July that she had split from her husband.
Iacub's new work is the latest in a long line of books, plays, TV shows and movies on the spectacular fall from grace of a man who was once tipped to become France's next president.
The Socialist politician in December agreed a financial settlement with the hotel maid whose 2011 allegation of sexual assault forced him to resign from the International Monetary Fund.
He is still being investigated in France as part of a probe into allegations he procured prostitutes for sex parties in Europe and in Washington.
Books are rarely banned in France.
In 1996, a French court banned a book by Francois Mitterrand's doctor two days after the Socialist president's death in which the author Claude Gubler said the leader had lied about his cancer since it was diagnosed in 1981.
But the book was re-published in 2005 following a ruling against France by the European Court of Human Rights.