Prosecutor Andrew Edis said the revelation, found on Brooks' home computer in a 2004 letter from Coulson to Brooks, was not designed to invade their privacy but to better demonstrate their relationship of trust during the time they worked together at the newspaper News of the World.
Brooks, 45, was editor of the newspaper from 2000 to 2003. Coulson, 45, was her deputy and assumed the editor's title when she departed.
The two are on trial for charges related to phone hacking and illegal payments to public officials, and the information about the affair was revealed to reinforce the prosecution's contention both Coulson and Brooks were aware of the alleged illegal activity, the British newspaper The Guardian said Thursday.
The explosive disclosure came the day after the outlines of a new scheme of regulation for the British press received the royal assent Wednesday from Queen Elizabeth II.
The formal step is certain to be followed by months of legal and political wrangling, the Financial Times reported. Industry groups plan a legal challenge to the plan agreed to by the major political parties. Details of the plan still have to be worked out.
News executives say the regulatory plan, based on a report by Lord Justice Brian Leveson, impinge on press freedom and place too much of a financial burden on the media. Critics say officials also failed to consult industry executives.
"I don't know of any major newspaper group who would sign up to this. It still could be ruinously expensive and unworkable," an unnamed newspaper executive told the Times.