US District Court Judge Frederic Block made the award Monday after a jury ruled in November that Jerry Wolkoff, the owner of the buildings that comprised 5Pointz, violated the artists' rights under federal law.
Eric Baum, an attorney for the artists, told CNN that the decision is "a triumph for artists all around the country."
"The cultural significance of 5Pointz and the value of the aerosol art created by the 21 plaintiffs has been recognized as fine art. It is now clear that the federal law protects the dignity of the artist and ensures that their artwork is treated respectfully," Baum said.
The law, known as the Visual Artists Rights Act, affords legal protections to artists whose work meets certain requirements, whether or not the artists own the work.
5Pointz, a warehouse complex in the Long Island City section of Queens, was a street-art mecca that drew visitors and artists from around the world. Wolkoff had allowed artists to paint murals and graffiti on the buildings he owned since 2002 and over time, the location evolved into a New York City cultural landmark that appeared in tourist guidebooks.
The complex took its name from New York's five boroughs and also was used as a filming location for music videos, movies, TV shows and various commercial photo shoots and fashion shows.
Jonathan Cohen, an artist who had worked with Wolkoff for decades as a volunteer curator of 5Pointz, oversaw the growth of the project and conducted over 100 school tours each year.
Wolkoff told CNN in 2013 that he decided to paint over the walls because the building would take several months to tear down and he didn't want the artists' work to be ruined in the process.
However, the artists argued that Wolkoff never warned them of his intention to paint over the artwork prior to the buildings' demolition. They said Wolkoff denied them the opportunity to remove and preserve their work, calling his actions "gratuitous, willful, and malicious," according to court documents.
Neither Wolkoff nor his attorney, David Ebert, have returned CNN's request for comment.
Each of the 21 artists will be individually awarded amounts that range from $75,000 to $1.3 million, according to court documents.
In his decision, Judge Block did not argue with Wolkoff's authority to demolish the buildings he owns. But he took issue with his decision to whitewash the art without prior notice or regard for the artists' ability to preserve their work.
"The shame of it all is that since 5Pointz was a prominent tourist attraction the public would undoubtedly have thronged to say its goodbyes ... and gaze at the formidable works of aerosol art for the last time," Block wrote. "It would have been a wonderful tribute for the artists that they richly deserved."
CNN's Dominique Debucquoy-Dodley contributed to this report.