The 77-year-old singer sued the broadcaster following its coverage of a South Yorkshire Police raid on his home in Sunningdale, Berkshire, in August 2014.
Officers were investigating an allegation of historic child sex abuse against him, which Sir Cliff has always denied.
The star was never arrested or charged with any offence.
High Court judge, Mr Justice Mann, said the BBC had infringed the celebrity’s privacy rights in a “serious and sensationalist way”.
He awarded £190,000 in general damages to cover “the general effect on Sir Cliff and his life”, plus an additional £20,000 in aggravated damages, due to the fact the BBC later submitted the story for an award.
His lawyer said the payout was one of the highest amounts ever awarded in this area of the law.
It is possible the figure could substantially increase as the judge has yet to assess how much the singer has been left out of pocket as a result of the BBC coverage.
Sir Cliff told the judge before the raid he worked regularly, released a new album every 18 months or so and usually played a number of concerts, but had been left “in effect in creative limbo” for two years.
He said the BBC coverage was a “very serious invasion” of his privacy, and he wanted damages at the “top end” of the scale.
At the time of the police search – which was filmed from a helicopter and broadcast to numerous countries – Sir Cliff was in Portugal.
During the trial earlier this year the singer described how he had fallen to his knees sobbing when watching the live footage of the raid.
He said it was like “watching burglars in my apartment, going through my personal belongings”.
The BBC disputed his claims, with bosses saying the coverage was accurate and in good faith.
Speaking outside the court following the judgment, an emotional Sir Cliff said: “I’m choked up. I can’t believe it. It’s wonderful news.”
He told fans it would “take a while to get over the whole emotional factor” of what had happened, adding: “I hope you’ll forgive me. I’ll talk to you some other time.”
Friends of Sir Cliff, broadcaster Paul Gambaccini and presenter Gloria Hunniford, were both at court to support him.
In a statement, Sir Cliff’s lawyer Gideon Benhaim said the BBC had refused to apologise and had been “defiant” in their insistence that the story was in the public interest.
He also said Sir Cliff’s motivation in pursuing the case was not financial, but was to “try to right a wrong” and make sure “no other innocent person had to endure what he went through”.
Sir Cliff has previously said the case cost him £3.4m.
Mr Benhaim also questioned whether senior BBC executives had exercised sufficient scrutiny over their journalists.
In his ruling, the judge found that “the BBC was much more responsible than SYP”, and said damages (excluding the aggravated damages) should be split 65% to 35% between the BBC and SYP respectively.
BBC director of news Fran Unsworth said the judgment would not just affect the corporation, but every media organisation’s freedom to report on police investigations.
She said the resulting lack of scrutiny could “undermine the wider principle of the public’s right to know” and would “put decision making in the hands of the police”.
The corporation is considering an appeal against the judgment.
South Yorkshire Police (SYP) previously settled a damages claim with Sir Cliff out of court, agreeing to pay him £400,000.