The museum confirmed the High Court at Wellington froze her assets and she was ordered to repay the funds with interest and costs.
Once the fraud was discovered, the woman was immediately suspended while an investigation was undertaken, and she resigned with immediate effect.
The museum said Te Papa launched civil proceedings to recover the funds.
Chief executive Courtney Johnston said they were deeply disappointed by the betrayal of trust.
"The fraud was sophisticated, well-planned, and carefully covered up.
"Te Papa has controls in place to prevent fraud, and we have reviewed and tightened these after discovering this theft."
As a result of the fraud, Te Papa said IRD had incorrect records for the casual staff, potentially affecting their tax bracket, student loan or Kiwi Saver details.
The museum also engaged accountancy firm KPMG to undertake an independent review of its payroll controls.
Te Papa confirmed the matter has been referred to police for a criminal investigation and it has provided police with the findings of its own investigations.
A police spokesperson said they had received a complaint in relation to the matter.
Payroll Practitioners Association chief executive David Jenkins told the Herald there should have been more safeguards.
"This is just one person's behaviour and it's not across the industry, this is a one-off case."
