Ntokozo Skhosana's family took the department and Gauteng Premier Nomvula Mokonyane to court after he became paralysed during birth at the Far East Rand Hospital in Ekurhuleni.
When Ntokozo was born in March 2004 he suffered from cerebral palsy and had a paralysed left arm diagnosed as Erb-Duchenne Palsy or Erb's palsy. It is a paralysis of the arm caused by injury to the upper group of the arm's brachial plexus nerves, when the shoulders get stuck and are pulled with force through the birth canal.
The Skhosanas instituted legal action against the Gauteng health department and premier's office in 2009.
Deputy Judge President Mojapelo of the Johannesburg High Court ruled that Ntokozo be paid R11,620,663.
His mother, Fuki Skhosana, said: "The past three years have been tough. I am so relieved that it is over. We can now start a new life and get a house next to Ntokozo's school. I am so happy Ntokozo is in school now. He is coping so well."
Ntokozo has just started Grade 1 this month at a boarding school for children with special needs.
His unemployed mother said: "It has been harder raising two children on my own. The older one is 13 years old. But what can I do? I have to face life."
The family lives in a two-roomed shack at Zenzele informal settlement in Daveyton. They have no electricity, water or plumbing and use a pit toilet in their backyard. The closest water point is 300m away.
Ntokozo's lawyer, Gary Austin, said he was relieved the case was over and the family can now start afresh.
"In terms of the order the money will be placed in a trust and invested and administered for the benefit of Ntokozo.
"We are so happy that we can now assist the family to obtain a proper house, equipment and the medical treatment that Ntokozo and the family deserve," Austin said.
Skhosana survives on the state child grant of R1,200 to support her two boys .
Austin previously represented Sibusiso Prince Khanyi, 12, in a case against the department and Mokonyane.
Sibusiso was born brain damaged on December 2 1999 at Pholosong Hospital in Tsakane, Ekurhuleni.
Johannesburg High Court Judge Nigel Willis found that nurses failed to diagnose the fact that the unborn child was "in breech" - that he would come out feet first instead of the normal head down.
Judge Willis ordered Gauteng premier Mokonyane to pay R9.25-million to Sibusiso , but Mokonyane's office appealed the ruling .
Austin said: "The money was paid to Sibusiso and the family now has a house. We are in the process of getting him a car and to see a special surgeon."