Ms Powell - who became notable for saying her lawsuits challenging the election were akin to "releasing the Kraken" and for spreading conspiracy theories - made Dominion Voting Systems the center of her legal challenges to the 2020 election results.
She also claimed that deceased Venezuelan dictator Hugo Chavez had some influence over the alleged software that would one day be used to defeat Mr Trump.
“Powell falsely claimed that Dominion had rigged the election, that Dominion was created in Venezuela to rig elections for Hugo Chávez, and that Dominion bribed Georgia officials for a no-bid contract,” the lawsuit reads.
Dominion is seeking $650m in reputational damages and another $650m for punitive damages.
The company claims it has spent millions providing security for their employees and for public relations work to maintain their image.
“Today is the first step to restore our good name and faith in elections by holding those responsible to account,” he said. “We intend to pursue justice vigorously to its rightful end.”
In addition to the $1.3bn, the company is also seeking a legal injunction against Ms Powell that would force her to remove all of her defamatory comments about Dominion and prevent her from making them again in the future.
Prior to the lawsuit, Dominion sent Ms Powell a cease and desist letter threatening legal action.
Rather than heeding the warning, Ms Powell doubled down and tweeted out that she would "retract nothing" because she had "#evidence" that Dominion was committing fraud.