Tang Hui, who became a figurehead for critics of the "re-education through labour" system after she was condemned to 18 months in a camp, won a total of 2,641 yuan (USD 430) following an appeal, a court spokesman surnamed Zhang told AFP.
The court in Changsha, the capital of the central province of Hunan, awarded compensation on the grounds that local authorities had violated Tang's personal freedom and caused her "psychological damage", Zhang said.
The police chief of Yongzhou, who headed the committee that sentenced Tang, said during the hearing that he had "not acted with enough humanity or care", Tang told AFP earlier this month.
She was released last August after just over a week in a labour camp following a public outcry over her case, which was given unusual prominence in state-run media and prompted speculation that the system would be abolished.
Also Read
The compensation award comes as a surprise after Tang lost her initial case. She herself had estimated the chance of success in her appeal as a "remote possibility".
Seven men were finally convicted in June last year, with two condemned to death, four given life sentences and one jailed for 15 years.
But Tang continued to agitate for the policemen to face trial, and soon afterwards she was sentenced for "seriously disturbing social order and exerting a negative impact on society".
She could not be reached for comment after the court decision but posted a brief message on a verified account opened in recent days on China's Twitter-like microblog service Sina Weibo: "Thank you everyone."
Premier Li Keqiang said in March that the system would be "reformed", without giving further details.
US-based advocacy group the Dui Hua Foundation said on its website last month that some re-education through labour facilities had been "quietly taking formal steps to transition into compulsory drug treatment centres", citing local media reports.