The former Italian prime minister agreed to payments totalling €36m a year to Ms Lario but successfully argued against her claims on the bulk of his fortune, including the family property portfolio and his business interests.
The size of the settlement provoked a strong reaction in a country where austerity reforms and a continuing recession have made it harder to make ends meet.
Mr Berlusconi ranks 169th on the 'Forbes' list of billionaires, with a reported net worth of more than €4bn.
Ms Lario (56) was particularly keen to have Villa Belvedere, the estate near Milan where the couple raised their three children during their 22-year marriage, but the judge ruled it would remain Mr Berlusconi's as their children were no longer minors.
The agreement formally ends the high-profile relationship, which began more than three decades ago. The Bologna-born actress caught Mr Berlusconi's eye in 1980 while acting in a play in Milan called 'The Magnificent Cuckold'. The couple married in 1990 after Mr Berlusconi divorced his first wife, Carla Dall'Oglio, in 1985.
Over the years, the details of their love affair, seemingly idyllic marriage and painful public separation played out like a national soap opera. The 76-year-old's penchant for consorting with young models finally became too much for Ms Lario, who accused him of being a sex addict who "needs help".
In 2007, she wrote a letter that stated that her "dignity as a woman" had been hurt after Mr Berlusconi publicly joked to Mara Carfagna, a showgirl who later became a parliamentarian, that he would run off with her if he were not married.
The last straw was his decision to attend the 18th birthday party of Noemi Letizia, an aspiring lingerie model. Ms Lario said she could no longer bear to be with a man who "mixes with underage girls".
Mr Berlusconi has recently been dating Fancesca Pascale, whom he met in 2004 when she was 19.
Meanwhile, Italian Premier Mario Monti announced yesterday he is heading a new campaign coalition made of up centrists, business leaders and pro-Vatican forces backing his "ethical" vision of politics, paving the way for him to secure a second term if his alliance wins big in February elections.
It remains to be seen if Monti's reformist alliance will garner enough backing to allow him to call the shots after the vote. Recent polls have shown that such a grouping, with Monti at the helm, would garner about 15pc of the vote. (© Daily Telegraph, London)