The 67-year-old Oscar-winning actor sued the Daily Telegraph's publisher and journalist Jonathon Moran over two stories and a poster published in late 2017.
They related to an allegation Rush behaved inappropriately toward a co-star - later revealed to be Norvill - during a Sydney Theatre Company production of King Lear.
In Sydney's Federal Court on Thursday, Justice Michael Wigney found Rush had been defamed by the Telegraph and awarded him $850,000 for general and aggravated damages.
A further hearing will be held in May to consider special damages which could run into the millions of dollars.
Justice Wigney said he wasn't persuaded Norvill's evidence was "credible or reliable" while he accepted Rush's testimony.
He said the Telegraph and Moran's conduct in publishing the first defamatory article on November 30 was "improper and unjustified".
"This was, in all the circumstances, a recklessly irresponsible piece of sensationalist journalism of the worst kind," Justice Wigney said.
"Those articles were published in an extravagant, excessive and sensationalist manner.
"Nationwide and Mr Moran were reckless as to the truth or falsity of the imputations they in fact conveyed."
It was difficult to avoid the conclusion that the article headlined "King Leer" was "calculated to damage", the judge said, adding the impact on Rush was "devastating".
Outside court, the actor said: "There are no winners in this case - it has been extremely distressing for everyone involved."
Norvill stood by her testimony, stating: "I told the truth and what happened, I was there."
She echoed Rush's comment that there were "no winners" and called for "genuine, cultural change in our professions and industries".
"It has to be possible for a young woman working in theatre, who feels unsafe in her workplace, to get that situation fixed," Norvill told reporters.
"I will be spending a lot of my time on that issue from here on in and I am very much looking forward to getting back to my acting too."
Telegraph editor Ben English said the newspaper was "disappointed" with Justice Wigney's findings and his dismissal of Norvill's evidence.
"We disagree with his criticisms of her and she has our full support," English said in a statement.
"We will now review the judgment."
Norvill testified at last year's trial that Rush deliberately stroked the side of her breast during a preview performance when her character was dead onstage.
He also stroked Norvill's lower back backstage, made groping gestures toward her during rehearsal and would sometimes growl and call her yummy, she alleged at the time.
