The drama by Ildiko Enyedi, one of four female filmmakers in competition, features graphic scenes in an abattoir set against the budding romance of two people who share a recurring dream.
The win marked an upset at the 11-day Berlinale, where a European refugee comedy by cult Finnish filmmaker Aki Kaurismaki, "The Other Side of Hope", had been tipped as the odds-on favourite.
Kaurismaki took the Silver Bear for best director.
"We wanted to present you a very simple film like a glass of water and it was risky," she said.
"All my team, my colleagues, I believed in it but we couldn't know if the audience would join us because this film is approachable only with a generous heart."
The runner-up jury prize went to Franco-Senegalese filmmaker Alain Gomis for "Felicite" about a Kinshasa nightclub singer who has to struggle to scrape together funds to pay for his son's treatment after a serious road accident.
He cited the challenges of making the film, noting it had been a "difficult year in the Democratic Republic of Congo", and said he hoped the prize would advance African cinema.
South Korea's Kim Min-hee, the star of intimate drama "On the Beach at Night Alone" which tackles a failed love affair with a director, won best actress.
And Austria's Georg Friedrich won best actor for his role in the German drama "Bright Nights" as a mourning father who takes his teenage son on a road trip through Norway.
Best screenplay went to another favourite of the festival, "A Fantastic Woman" by Chile's Sebastian Lelio, starring transgender actress Daniela Vega.
Lelio, joined on stage by Vega in an evening gown, said the film about a singer fighting for her right to attend the funeral of her much older lover after his sudden death was a call for tolerance in trying times.
Best documentary, awarded for the first time at the festival, was picked up by Palestinian director Raed Andoni for "Ghost Hunting".
The film recreates a notorious Israeli interrogation centre -- and has ex-prisoners re-enact experiences in a bid to free them of their demons.
"I work with people living in the most dark place and getting honoured in this light... I feel honoured," said Andoni, who also served time behind bars in Israel.
"We still have 7,000 Palestinians living in those jails... They never get the recognition as I do."
Disclaimer: No Business Standard Journalist was involved in creation of this content
