Following a 22-day civil trial in the Supreme Court of Tasmania, Stephen Noga was found to have raped the woman in a Hobart hotel in 1981 when she was aged 16 and his student.
Judge Stephen Estcourt said he didn't accept Noga's denials, describing the woman, who is terminally ill, as an impressive witness.
"It might have been that, in his own mind, Mr Noga had planned and was executing a romantic seduction of a young woman, but what resulted was the callous raping of a child," Justice Estcourt said in a decision published on Tuesday.
Noga has not been charged criminally.
The state of Tasmania was found vicariously liable, but not directly liable, for acts committed by Noga when he was employed as a teacher.
The state wasn't held vicariously liable for any acts that occurred after the woman graduated in late 1981.
Justice Estcourt rejected claims of systemic failures, saying there was no evidence anyone employed by the state had any knowledge, or ought to have any knowledge, of the abuse.
The woman accused Noga of initially staring at her in the classroom, standing very close to her and commenting on her appearance.
Justice Estcourt said he wasn't satisfied to the requisite standard that the alleged classroom conduct was grooming and said it could better be described as "unwanted attention".
Noga had denied sexually abusing the woman when she was his student but said they had sex twice in the months after she graduated, once she had turned 17.
The woman was awarded $1,444,817.03 in damages to be paid by Noga and the state.
Noga was ordered to pay $200,000 in exemplary damages, with the judge saying his actions showed a shocking, deliberate and intentional disregard of the woman's rights.
The woman's post-traumatic stress disorder and borderline personality disorder were caused by the abuse, Justice Estcourt found.
"We honour our client's perseverance and determination in fighting a case where the money will make little difference to her remaining time," Angela Sdrinis Legal, who represented the woman, said in a statement.
"It was a question of seeing justice in her lifetime which she feels that she has achieved not just for herself but for all survivors of abuse.
"(The ruling) should hopefully sound a warning bell to the state and individual perpetrators about the importance of protecting children in the education system and beyond."
1800 RESPECT (1800 737 732)
National Sexual Abuse and Redress Support Service 1800 211 028
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