Between 2009 and 2012 150 executives recieved severance packages from the BBC, including sacked director general George Entwhistle, who received £475,000 after just 45 days in the job.
The payments were uncovered in a report by the National Audit Office (NAO). It said the payouts were too generous and put public trust at risk.
The BBC said the savings it had made from senior management redundancies exceeded the cost of severance pay.
The BBC's director general Tony Hall said: "These payments were from another era and we are putting a stop to them."
"I believe the BBC lost its way on payments in recent years. I have already said that we will be capping severance payments at £150,000 and we have now begun to improve our processes."
The report found the average redundancy settlement for a senior BBC manager in the three years to December 2012 was £164,200.
In 14 of the 60 cases reviewed by the NAO, the BBC paid senior managers more salary in lieu of notice than their contractual entitlement, costing licence fee payers at least £1 million.
The NAO identified two cases where the BBC knew departing senior managers had secured other jobs before they had left but still paid them about £1 million.
Anthony Fry, who chairs the BBC Trust's finance committee, said: "We asked the NAO to carry out this review following public concern about the size and frequency of severance packages at the Corporation, and this report shows that those concerns were justified.
"Although the BBC has achieved significant savings in its senior manager pay bill, some of the NAO's conclusions are deeply worrying, particularly the failure to follow agreed severance policies in a number of cases as a result of weak governance from the BBC executive in the past."
"The Trust is clear that there cannot be a repeat of such a fundamental failure of central oversight and control."
The report found one senior manager gave his full severance back after he found out the payment was seriously deficient. Roly Keating, previously the BBC's director of archive content, left in 2012 to become chief executive of the British Library.
Keating, who had worked at the BBC for 29 years and was given a payout of £376,000 when he left the organisation before returning the amount in full.
