The 43-year-old singer, who has previously come out as bisexual, made the stunning admission while filming an interview for "Piers Morgan's Life Stories" series.
The mother-of-three confessed Geri had "great boobs," and said of the tryst, "It just happened."
According to British newspaper The Sun, Mel was forced to make a frantic phone call to Geri to apologise for the confession, amid claims the revelation about their past may upset her husband, Christian Horner.
Discussing her time in the world famous girlband, who first formed in 1994, Mel went into great detail about her relationship and friendship with mum-of-two Geri.
"We were best friends. It just happened. She (Geri) is going to hate me for this because she is all posh in her country house and her husband, but it's a fact. It just happened and we just giggled at it and that was it," the former "America's Got Talent" judge told Piers, before insisting that they only had sex once.
"This is a bombshell. A Spice Girls bombshell. You have never admitted this before have you? People are going to be fascinated!" a shocked Piers said.
Joking that Geri's husband Christian was going to kill her for sharing the news of their saucy romance, Mel replied, "Yeah and I have said it now. All done. She is going to kill me and so is her husband."
"Hopefully when Geri gets asked that, which hopefully she will after this, she won't deny it, because it was just a thing, a fun thing."
Spice Girls bandmate Mel C (Melanie C), who was in the audience, was said to be "visibly horrified" at Mel's revelation, according to The Sun.