The Jerusalem court on Wednesday ordered El-Al to pay Holocaust survivor Renee Rabinowitz 6,500 shekels ($1,860), said a transcript of the ruling.
Ultra-Orthodox Jews follow strict rules segregating men and women.
Rabinowitz was travelling from Newark to Tel Aviv when a steward asked her to move to avoid discomfort to an ultra-Orthodox man assigned to the next seat, the Israel Religious Action Centre (IRAC) said.
IRAC, which represented Rabinowitz in court, said she had complied with the request but she felt humiliated and later decided to sue the airline.
Ultra-Orthodox rules on gender segregation have caused scuffles in the past when women on Israeli buses used predominantly by the ultra-Orthodox have objected to men insisting that they sit at the back of the vehicle.
IRAC, which is linked to the liberal Jewish Reform Movement, said the court's decision set a precedent.
"With the implementation of this ruling, a passenger asked to move their seat because of their gender will qualify as discrimination, and as such prohibited," it said in an English-language statement.
El Al's spokeswoman could not be reached for comment, but court documents said its lawyer had agreed that aircrew must not "under any circumstances" comply with requests for fellow passengers to be reseated over their gender.
The carrier agreed to send flight staff a written directive to that effect within 45 days and give training on the issue within six months.
IRAC director Anat Hoffman compared Rabinowitz to Israeli actress Gal Gadot, star of the Hollywood blockbuster "Wonder Woman".
"Just like Gal Gadot, Rabinowitz is a beautiful Israeli who has proven that she has superpowers," she said.
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