The defendants could face hundreds of millions of dollars in further damages after the court said environmental organisations could sue them over the ecological impact of the disaster.
It was the first time a French court had held the charterer of a tanker responsible for pollution caused through shipwreck.
Total said it was considering an appeal and the company's lawyers said the ruling was out of kilter with international norms on shipping regulation.
However, environmental groups like Greenpeace and representatives of the plaintiffs welcomed the decision.
"It is a very severe warning to careless transport groups, to the floating garbage cans that cross the seas, often in total impunity. It's a big legal step," said Segolene Royal, the former Socialist presidential candidate and head of the coastal Poutou-Charentes region that was badly hit by the accident.
The Erika broke in two and sank in heavy seas in the Bay of Biscay some 70km off the French coast on December 12, 1999, pouring 20,000 tonnes of toxic fuel oil into the sea.
The accident polluted 400km of beaches and shoreline, crippled local industries including fishing, tourism and salt production and killed tens of thousands of seabirds.
The case finally came to trial in February 2007.
Total argued that it chartered the ship in good faith, relying on official documentation certifying it as seaworthy.
Daniel Soulez-Lariviere, the company's lawyer, said: "All the oil companies are going to have to get round a table to work out what the consequences are."
The trial lifted the lid on a murky world of offshore-registered tankers and labyrinthine ownership arrangements that made it difficult to establish responsibility for the disaster.
Total was accused of marine pollution, deliberately failing to take measures to prevent the pollution and complicity in endangering human life, a charge of which it was found not guilty.
Plaintiffs accused the company of negligence in hiring the ship and of acting too slowly when the accident happened.
Total said it learned that the ship's internal structures were corroded only as a result of an examination after the accident.