New South Wales Supreme Court Justice Lucy McCallum made the award for articles published in January 2016 that alleged the 103-test cricketer had exposed himself to a masseuse during the tournament.
In October 2017, a jury found Fairfax had failed to establish the truth of the reports. It also found Fairfax had failed to establish that the allegation Gayle had propositioned the masseuse was "substantially true".
Justice McCallam said in her decision that the defamation "went to the heart of Mr Gayle's professional life as a respected batsman" and "had particular resonance in cricketing circles".
The jury also found that Fairfax was motivated by malice in publishing the stories, which could have left the company open to punitive damages.
Justice McCallam said she decided against aggravated damages because Gayle had not given evidence about whether the harm he suffered was increased by the malice.
Fairfax Media said the publisher intended to appeal because of concerns over the way the trial was conducted.
"The jury was misled in a way that prejudiced Fairfax, and Fairfax did not get a fair trial," a spokesman said in a statement.
"The damages award merely confirms the appalling burden of defamation laws in this country."
(Reporting by Nick Mulvenney, editing by Peter Rutherford/Sudipto Ganguly)
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