Bar Refaeli, 33, was accused of trying to conceal her earnings from tax authorities in Israel, after saying she was living in the United States between 2009 and 2010.
The model’s lawyers argued during that period she was living with her then-boyfriend Leonardo DiCaprio, so wasn’t liable for domestic income tax, The Times reported.
The ruling published last month said Bar had lived in Israel for 185 days in 2009 and 135 days the following year.
The verdict, handed down on April 10, found Bar’s version of events “evasive” and her claim that rent for her luxury apartment was paid without her knowledge to be “country to common sense”.
The judge rejected Bar’s claims she was living in the US, and ruled she must pay the massive bill form the Tax Authority that she received last June.
The star has now been ordered to pay £1.7 million in taxes, which was made public by Lod District, Lod, on Sunday.
It was ruled she must also pay another £26,000 in court fees.
Her legal team announced they would appeal the ruling.
Bar’s relationship with Titanic actor, Leonardo, began in 2005 and they were on and off until 2011.
The Sports Illustrated Swimsuit cover girl is now married to Israeli businessman, Adi Ezra, after tying the knot in September, 2015.
The couple share two daughters together, Liv, who turns three in August, and Elle, who is eighteen-months-old.
It comes as Bar prepares to host the first semi-final of Eurovision held at the Expo Tel Aviv in Israel this evening.
She will be presenting alongside Erez Tal, Assi Azar and Lucy Ayoub.
Tonight, 10 countries with the highest points qualify for the Grand Final, taking place this Saturday.
Forty countries including Cyprus, Montenegro, Finland, Hungary, Portugal, Estonia, Greece, Serbia, Australia and Poland, will be competing tonight.
Yesterday, Bar appeared to share a glimpse of one of her Eurovision outfits in a backstage outfit.
The model looked incredible in a sequinned dress which put her incredible physique on full display.
Bar exposed plenty of leg as she faced towards the mirror and leant forward for the snap.
She simply captioned the snap: “Backstage.”
The first Eurovision Song Contest semi-final will air tonight from 8pm on BBC 4.