In a decision of major importance for the fight against corruption in Africa, a judge held that Dr Chiluba took part in two separate conspiracies to siphon off the money.
Part of his ill-gotten gains was laundered through two London law firms, Meer Care & Desai and Cave Malik & Co, who were part of the conspiracy.
In a graphic and telling example of the corruption involved, Mr Justice Peter Smith said Dr Chiluba, president between 1991 and 2001, had a worldwide reputation as a "smart and expensive dresser".
He had hundreds of stylish suits and shirts bearing his monogram "FJT", and specially made "signature" shoes with extra-high heels.
As president, he officially earned about £52,500 over 10 years. Yet an exclusive shop in Switzerland - Boutique Basile - received £600,000, all stolen from the Republic of Zambia.
"This was at a time when the vast majority of Zambians were struggling to live on one dollar a day and many could not afford more than one meal a day," the judge said. "FJT had the benefit of this largesse at the expense of the people of Zambia. He still wears some of the clothes.
"The people of Zambia will know that whenever FJT appears in public wearing a smart handmade suit or a pair of his "signature" shoes that they were acquired by stealing money from the people, the vast majority of whom live at subsistence levels."
The ruling found that Dr Chibula received over £500,000 for clothes, while another £181,000 was plundered by an aide to pay school fees. Other money was siphoned off as cash to buy motorbikes, and over £6,000 was spent on a beauty therapy course.
Janet Legrand, of global law firm DLA Piper, which acted for the Zambian government, said the judgment was a "resounding victory" for President Levy Mwanawasa's battle to stamp out corruption.
Zambia's case was backed by the UK government through an anti-corruption fund that has contributed more than £1m to various causes over the past three years.
The international development secretary, Hilary Benn, said today's ruling was a "historic victory" for Zambians.
"This money, intended to benefit all Zambians, was instead plundered by a few. The money recovered can now be returned to the government of Zambia to be invested in the people's future - such as education or clean drinking water for some of the seven million Zambians living in poverty," he said
However, today's ruling could re-ignite debate about the City of London's role as a centre for international money laundering.
Britain is a signatory to Organisation for Economic Co-operation and Development and United Nations anti-bribery conventions but has been criticised by the OECD for failing to devote sufficient resources to the fight against corruption.
Trisha Rogers, director of the Jubilee Debt Campaign, said she was "delighted" with today's ruling but criticised the paucity of assets that have been returned to African people.
Much of the ill-gained money in today's case was held in British bank accounts, she added. Details of precisely how much is recoverable - freezing orders were obtained at the commencement of proceedings - from each defendant will be decided by the court at a later date.
The judge was giving judgment in civil proceedings, brought by the attorney general of Zambia, after a hearing spread over four months and held in private to protect the interests of the Zambian defendants involved in criminal proceedings.
The case was brought in London because it was considered to be the centre of wrongdoing by defendants based in Zambia and elsewhere and because the stolen money passed through bank accounts in London.
Other defendants found liable by the judge were Xavier Chungu, former head of Zambian secret intelligence services, Stella Chibanda, a former senior official in the Ministry of Finance, and two financial advisers and directors of Access Financial Services Ltd - Faustin Kabwe and Aaron Chungu.
The judge also held that the former Zambian ambassador to the US, Atan Shansonga, was liable for giving dishonest assistance in respect of about £1.4m.
Raphael Soriano, a Congolese now resident in Belgium, participated in the misappropriation of £10.5m.
And the judge held that FJT's Swiss tailors, Basile, were liable for £600,000 for conspiracy and dishonest assistance.
Mr Chiluba's election, after decades of rule by Kenneth Kaunda, led to a wave of optimism which dissipated as economic problems deepened. A former union leader, Mr Chiluba as president backed free-market policies and oversaw the privatisation of many nationalised industries.
He left power after failing in an attempt to rewrite his country's constitution to enable him to stand for a third term and has been dogged by corruption allegations ever since.
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