The court in Santiago ordered the church to pay 100 million pesos – around $146,000 – to each of 3 of his victims.
Juan Carlos Cruz, Andres Murillo and James Hamilton had sued the church for "moral damage" for covering up years of sexual abuse perpetrated by Karadima, a senior Chilean cleric.
The decision to award damages for sexual abuse against the Catholic Church is the first of its kind in the conservative Latin American country.
"This helps all of us who have experienced this horror and for that we are happy," Cruz said in an initial reaction on Twitter.
The scandal around Karadima – who trained many of the current Chilean hierarchy – has haunted the church for over a decade.
A legal case by his victims faltered because the 10-year statute of limitation on such crimes had expired.
In their criminal complaints, the victims said they had been abused by Karadima, between 1980 and 1995 during visits he made to a parish they attended as boys in an upscale Santiago neighborhood.
In 2011, a Vatican canonical court found the priest guilty of sexual abuse of minors and ordered him confined to a nunnery and forbidden from saying mass.
Pope Francis eventually defrocked Karadima last year, banning the 87-year-old from the priesthood at the height of public outrage in the South American country over clerical sexual abuse and its concealment.
'Culture of abuse'
A Vatican investigator dispatched by Francis to Chile concluded there was "a culture of abuse" within the Chilean church, in a 2,300-page report.
Scandals in Australia, Europe, North America and elsewhere in Latin America have involved widespread claims of abuse – and cover-ups – by clergymen and lay members of the church.
The pope later invited Cruz, Murillo and Hamilton to meet him at the Vatican to hear their testimonies and ask for their pardon.
In May last year, Francis summoned all 34 Chilean bishops to Rome over the crisis and all offered to resign, though Francis has so far only accepted a handful.
Karadima's case has proved particularly damaging for Francis, who had publicly defended a bishop accused of covering up Karadima's crimes when he visited Chile last year.
Francis eventually accepted he was wrong to back 61-year-old Juan Barros, and subsequently accepted his resignation along with 6 other Chilean bishops.
Wednesday's ruling recognized the church was negligent in not investigating allegations of abuse by the 3 men made to Karadima's superiors, Cardinal Ricardo Ezzati – replaced by Pope Francis as Santiago's archbishop last week – and his predecessor Cardinal Javier Errazuriz.
Errazuriz initially shelved an investigation, though a subsequent Vatican probe convicted Karadima under Canon law.
The ruling also established the church did not properly exercise its duty of vigilance over Karadima.
The Vatican defrocked 14 other priests in May last year after investigating the sexual abuse of minors in the Rancagua region of Chile.
Prosecutors in Chile have placed nearly 170 members of the church under investigation for either perpetrating sexual abuse or of covering it up. – Rappler.com