Former caretaker George Johnston, 63, was hit by the bus as he cycled home through Oxgangs in 2004, but the case has only just been resolved at the Court of Session.
As a result of the fall, Mr Johnston's artificial hip joint, fitted two years before the accident, worked loose and he needed another operation.
It was claimed that without the injury, the Prestonfield man would have been able to keep on working until he was 65 years old.
The court heard that at the time of the accident, council driver Daniel Toorish, of Duddingston Road South, had taken the Renault bus home during his lunch-break and was going across town to pick up disabled passengers.
Mr Toorish told the court that he was in front of Mr Johnston's bicycle and stopped at the junction, very near the kerb. The cyclist attempted to go past but hit the bus.
He insisted that Mr Johnston had then "staged" a fall that he described as "a pathetic stumble . . . the most pathetic fall you would imagine". The driver also described the cyclist's ordeal as a "comedy act".
Lawyers for the council, contesting the action, said Mr Toorish was an experienced driver, and pointed out Mr Johnston had cycled away without trying to blame the driver at the time. His evidence was inconsistent with someone who had been knocked off a bike, they argued.
Finding in favour of the cyclist, Lord McEwan said he believed Mr Johnston's contention that "rage and adrenalin allowed him to cycle home".
In a written opinion, Lord McEwan remarked: "What happened as they each went on their way is a matter of acute disagreement and there can be no escape from the conclusion that one of them has been untruthful."
Mr Toorish, said the judge, was "an aggressive and self-serving witness".
The judge also said he accepted medical evidence that the artificial hip joint had been loosened by the bump and the damage had got worse.
Before the accident Mr Johnston had been fit and active and cycling 14 miles a day, the court heard.
Mr Johnston, of Paisley Crescent, last night welcomed the judgement.
He added: "I'd like to move on from it now. I had an accident and I got compensation for what happened. I don't want to cause any trouble for the driver."
Mr Johnston said as he turned left the minibus tried to overtake but clipped his right handlebar. He lost his balance and jumped clear to avoid the bicycle from falling on top of him, landing heavily on his left foot.