Phillip Day, the 47-year-old chief executive of the Edinburgh Woollen Mill retail chain, admitted two counts of damaging Gelt Woods Site of Special Scientific Interest (SSSI) near Brampton.
Natural England brought the prosecution after Day felled trees and excavated land within the gorge woodland in order to create a track. The government agency confirmed it was the largest ever fine levied in a case it had brought.
Presiding Judge Peter Hughes QC said Day had been "grossly negligent" and had sought "to use the power of his wealth to avoid responsibility", and added that he intended that the substantial fine imposed should serve as a deterrent to others.
Natural England’s regulation director Janette Ward said afterwards: "We were disappointed that a woodland of such ecological importance, and one that was very special to the local community, was so severely damaged.
"We welcome the fact that Mr Day has undertaken a programme of voluntary restoration and hope that he will now work with us to manage this special area more appropriately in the future."