The late music legend's back catalogue, including his final album 'Blackstar', has sold more CDs, vinyl and downloads than any other artist of last year.
The British Phonographic Industry (BPI) made the announcement at the 38th annual All About the Music 2017 yearbook.
BPI also revealed that the UK is the third biggest recorded music market after the US and Japan.
Geoff Taylor, Chief Executive BPI & BRIT Awards, said: ''This is an exciting time for British music as more fans enjoy today's new artists and also explore the infinite jukebox available on streaming services.
''The UK punches above its weight as the world's third largest market, responsible for one in eight albums sold globally, including four of 2016's Top 10, and is the second-largest digital and streaming market after the US.''
The 'Starman' hitmaker is still making waves from the grave as his musical 'Lazarus' has become a virtual reality experience.
The acclaimed show - which features music and lyrics composed by the late singer - recently enjoyed a two-month stint at London's Kings Cross Theatre, and was hosted at the Victoria and Albert Museum's 2017 Performance Festival last month.
Prior to arriving in London, 'Lazarus' enjoyed a successful six-week stint in New York City in late 2015 and early 2016.
Bowie had dreamed of creating a production for Broadway and London's West End during his childhood.
But the music icon admitted to scrapping plans to write 'The Rise and Fall of Ziggy Stardust and the Spiders from Mars' and George Orwell's '1984' for the stage, before he eventually threw his weight behind 'Lazarus'.
Reflecting on his career dreams during an interview in 1999, he shared: ''When I was a teenager I had it in my mind that I would be a creator of musicals for the West End and Broadway, and people would do my songs.
''I was not a natural performer, I didn't feel at ease on the stage. Ever.
''I had created this one character, Ziggy Stardust; it seemed that I myself would play him because no-one else was doing my stuff. I felt really comfortable going on stage as somebody else and it seemed a quite natural idea to keep doing that.''
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