In a ruling released on Friday, the Supreme Court found four directors, including Dame Jenny, breached their duties under the Companies Act by allowing Mainzeal to trade while insolvent.
Mainzeal was one of New Zealand's biggest construction firms when it went under in February 2013, responsible for projects worth around $NZ7.5 billion ($A6.9 billion) and with about 500 employees.
Liquidator Andrew McKay told Radio NZ the decision ended over eight years of court proceedings.
"This is a landmark judgment which reinforces the obligations directors have to fulfil their duties diligently and responsibly," he said.
"The Mainzeal directors knowingly, and recklessly exposed creditors to illegitimate risk with their trading while insolvent and 'rob Peter to pay Paul' strategies."
Mr McKay said creditors lost more than $NZ111 million ($A102 million) from the collapse.
Former chief executive Richard Yan has been made liable for the total $NZ39.8 million ($A37 million) in penalties, while costs to Dame Jenny, Clive Tilby and Peter Gomm have been capped at $NZ6.6 million ($A6.1 million) plus interest.
That interest, calculated since the collapse over 10 years ago, will be significant.
The hearing was staged in March 2022 before a panel of five Supreme Court justices led by chief justice Helen Winklemann, releasing its decision 18 months later.
Dame Jenny was NZ's first female prime minister, leading a National-led government between 1997 to 1999.
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