The Christmas lottery awarded 180 jackpots, known as El Gordo (The Fat One), each worth $5.2 million.
The series of 180 tickets carrying the winning number 58268 was sold entirely in Granen, a village of nearly 2,000 residents in Huesca province.
"I am very happy. Everyone is on the streets, uncorking bottles of champagne," said Jose Coll, 73, who won $260,000.
It is rare for anyone to win the entire jackpot, because most people only buy fractions of a ticket, which each cost a hefty $260.
Some Granen residents, however, expressed disappointment that some of the winning tickets had been sold to neighboring villages.
Many Spaniards had pinned their hopes on the lottery after being hit by the country's worst economic crisis in decades.
Every Spaniard spent an average of nearly $74 on the lottery. Sales only went down by 0.5 percent from 2010, despite the country's unemployment rate of more than 20 percent and a stagnant economy.
The lottery is also known in other European countries and as far as Asia, where people buy tickets over the Internet.
When children from the San Ildefonso school for orphans chanted the winning numbers during the draw, which lasted more than three hours, the entire country came to a standstill as people clustered in front of television sets.
The Spanish Christmas lottery is not only the world's biggest, but also the oldest. In its current form, the lottery marks its 200th anniversary next year.
Its origins go back to 1763, when King Charles III introduced it to raise money for state coffers.
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