The release, which was issued five weeks ago, racked up enough sales during the Christmas break to become the first disc to sell more than five million DVDs.
It has overtaken Pirates Of The Caribbean: The Curse Of The Black Pearl, which has sold 4.7 million copies in the UK.
It rounded off a phenomenal year for Mamma Mia! The Movie, which has already been named as the fastest-selling DVD, shifting 1.669 million on its first day of sale and in mid-December it was announced that the movie had overtaken Titanic to become the highest grossing film in the UK, with a turnover of more than £69 million.
The movie soundtrack has been confirmed as the the biggest selling compilation of 2008, with a million copies flying off the shelves.
The Official Charts Company's all-time list covers all sales from the launch of the DVD format in Spring 1998 through to the end of 2008.
The two movies are the only two DVDs to have sold more than four million copies in their lifetime in the UK, with The Lord Of the Rings: Fellowship Of The Ring in third place on the all-time list, selling 3.9 million.
Official Charts Company managing director Martin Talbot said: "Right from its release, Mamma Mia! has been a record breaker - when it was issued on DVD, it became the fastest seller of all time.
"This latest landmark further underlines the popularity of the movie, which is now 'officially' the British public's favourite DVD of all time - with one-in-four British households owning a copy."
The biggest selling titles in the 10 years of DVD are otherwise dominated by action-adventure titles such as Pirates Of The Caribbean, the Lord Of The Rings, Casino Royale and Gladiator.