Mr Justice Colton backed legal action by construction company FP McCann Ltd.
It brought the action after failing to land the deal to design and build the A8 dual carriageway between Belfast and Larne.
That was despite it submitting the lowest bid.
With the department also held to be in breach of a duty to the firm, compensation will be assessed at a later date.
FP McCann issued proceedings over the tender for the work it submitted in 2009 as part of a joint venture with Balfour Beatty in a public procurement process run by the DRD's Road Service.
The consortium, referred to as BBMC, did not secure the contract on the grounds that it had submitted an abnormally low tender, the court heard.
Lawyers for FP McCann claimed it had been unlawfully denied the work and should be entitled to damages.
The judge said there had been a clear breach of duty by the defendant in respect of its consideration of the BBMC bid.
Adjourning the case for further submissions in assessing the scale of payout, he added: "The defendant's breach of duty should be marked by a meaningful award to reflect the loss of opportunity to the plaintiff to be awarded a significant and potentially lucrative contract."

The move mirrors an update by Apple in September that allowed ad-blockers to be installed as extensions for the Safari browser.
Blockers on Samsung phones will have to be added in the same way and will not come as standard.
The new browser has begun rolling out for Android Lollipop or higher users.
Popular ad-blockers, Adblock Fast and Crystal, have already been made available for Samsung phones.
As well as making web pages less cluttered, ad-blockers often improve browsers' performance - and reduce the draw on phone batteries and data plans.
"Those who use ad-blockers will likely use other browsers than the default one," said advertising industry analyst Daniel Knapp at IHS.
"It's nonetheless important for Samsung to jump on the ad-blocking bandwagon."
"It wants to show customers that it is a premium brand that protects them as well as Apple."
Mr Knapp also told the BBC there had been a "seismic change" in the ad industry, in which marketing budgets were increasingly being moved from traditional forms of advertising to, for example, sponsorship deals.
He said it was those most highly prized by advertisers, young and affluent users, who were more likely to use ad-blockers in the first place.
"I think it's an expression of massive consumer dissatisfaction with the way the ad industry works," he said.
Ad-blockers work by removing scripts in web page code that would otherwise pull content from ad networks' servers.
In November, 18% of British adults online were using some form of ad-blocker, up 3% from June, according to a report from the Internet Advertising Bureau (IAB).
Meanwhile, in Facebook's annual financial filing, the social network announced advertising earnings of $5.64bn (Â£3.9bn) for the fourth quarter of 2015 but warned ad-blockers could "adversely affect" future profits.
"If such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed," it said.
But Mr Knapp said companies such as Facebook were less likely than other content publishers to be affected by mobile web ad-blockers because ads could still be delivered via their third-party apps.
"Think of ad-blockers being admitted to iOS 9," he said.
"They were all exclusively focused on the in-browser environment - not for third-party apps like Facebook."
The Department for Regional Development breached public contract regulations in rejecting a tender for a road contract worth up to £100m, a High Court judge has ruled.
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The latest version of the default web browser on Samsung's Android phones will allow users to install ad-blocker extensions.