The airport, which launched 15 new routes in 2016 to destinations including Paris, Dublin, Jersey, Sofia and Cluj, beat its previous busiest year by 11 per cent.
Passenger numbers increased month-on-month in comparison to 2015, with August the busiest, when more than 157,000 passengers travelled from the airport - double compared to August 2015.
The year’s figures mean DSA has now experienced 26 months of consecutive growth.
Steve Gill, chief executive of DSA, said: “We’re proud to have marked 2016 as our best year yet, with our warmest thanks to our customers for choosing to fly local.
“The launch of new routes through our partnerships with Flybe, Thomson, Wizz Air and the opening of the Great Yorkshire Way motorway link road to the airport have played a major part in our ability to offer our passengers even more value and choice, and these figures are a testament to that.
“To complement these growing numbers, we have also invested in our terminal facilities to continue delivering a smooth and pleasant journey through and whilst at the airport”
The year saw DSA welcome Flybe to the airport, opening up new European routes to recognised city break and leisure destinations, major travel hubs and a further ski destination from DSA in Chambery.
Wizz Air – which experienced 27 per increase in its own passenger numbers at DSA - also unveiled new connections to Sofia in Bulgaria and Cluj in Romania.
Combined with Thomson’s existing routes to popular locations, with newly launched flights to Dubrovnik and Bourgas, the airport is now offering more destinations than ever.
Steve added: “Our airlines’ codesharing agreements have opened up seamless long-haul connections to destinations such as Chicago, New York and Dubai, putting us in a fantastic position to support long haul tourism and business travel and in turn, the growth of the Sheffield City Region’s economy. We look forward to continuing our growth in 2017 and working with the region to develop our long term plans.”