The Australian singer says she was forced to strip off for the men’s magazine because she owed £150,000 and was too proud to ask her pop star sister Kylie to help her financially.
She said: Kylie knew why I was doing it. I could have asked her for the money, but it wasn't in my nature.
"I never wanted to admit the trouble I was in. I should have been looking at my finances."
Dannii appeared on the cover of Playboy in October 1995. The magazine sold out in less than four days and became one of the best-selling Australian editions.
However, the 38-year-old beauty admits it was difficult for her to go against her father Ron and mother Carol’s wishes.
She explained: "My parents didn't want me to do it. My dad was saying, 'Doing this is forever - you can never, ever change it.
"I would never disclose how much I was paid - but it had to be a lot to look at my parents' faces and see the anguish in my dad's eyes.
Despite the upset it caused her father, Dannii who had divorced husband Julian McMahon earlier that year felt liberated by the experience.
She said: "I don't regret it, but I feel relieved that people know why I did it - it's a huge weight off my shoulders.
"It was actually fun and I did feel liberated. I looked at the pictures and thought, 'I look all right!'
Dannii broke down in tears as she spoke with TV talk show host Piers Morgan about her financial problems and also 41-year-old Kylie’s battle with breast cancer.
Speaking about supporting the Wow hitmaker who was diagnosed with the disease in 2005 Dannii added: "You just go to another depth. You find strength within yourself that you never knew you had because you never needed it before.
"The proper one is the five-year all-clear and we're not there yet. She's been so strong. In my head it's not going to come back, that's just not going to happen."
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