The Bradford-based firm said it was proud to have played its full part in helping to feed the country throughout the crisis.
David Potts, Morrisons chief executive, said: “I wear the halving of profits as a badge of honour. We could have made no profit and it would have been a result.
"We have put the company's assets at the disposal of the nation. I am proud that we've lived up to our promises and paid our full part in feeding the nation."
The £290m Covid hit was due to costs related to staff absences, hiring temporary workers, security and store safety measures.
On top of that, Morrisons has chosen to support its communities and colleagues with a whole raft of measures such as extending its 10 per cent discount scheme for NHS workers until the end of the year, food and cash donations to food banks and pet rescue centres, a hike in salary so it pays a minimum of £10 an hour to all store colleagues and help for small suppliers so they stay afloat during the crisis.
Mr Potts said: "NHS workers have done, and are still doing, amazing work for all of us and we think this is the best way for Mozza's to show its appreciation."
He said that Morrisons spent 2020 on a "war footing" and he has been inundated with letters from people who were grateful that their elderly parents were able to phone in food orders at a time when they had nowhere else to shop.
Mr Potts added: “I’m pleased with the greater recognition, warmth and affection for the Morrisons brand from all corners of the nation, following a year like no other.
"The year ahead contains uncertainty and none of us know when this pandemic story ends, but with vaccinations racing ahead, we do now know how it ends and we're ready.
"We enter the year with strong trading, a strong financial position, 120,923 motivated and dedicated colleagues and a brand that customers love."
Morrisons reported an 8.6 per cent jump in like-for-like sales in the year to January 31.
Profit before tax and exceptionals fell 50.7 per cent to £201m, including £290m direct Covid-19 costs to help feed the nation through the crisis.
Andrew Higginson, chair of Morrisons, said: “This has been a year where Morrisons resilience has been severely tested and I could not be more proud of the way the whole business has met that test.
"As we look forward to brighter times ahead, Morrisons is developing into a stronger, better business with deeper and closer relationships with our customers and the communities we serve.”
Profit before tax and exceptionals would have been up 5.6 per cent to £431m before the payment of £230m of waived Government business rates relief.
Pre-tax profits fell 62 per cent to £165m after net exceptional costs of £36m including online capacity transformation, impairment and restructuring.
The supermarket chain said online sales tripled during the year, with capacity up fivefold. Both online and wholesale are profitable and it expects profits to keep improving.
Analyst Clive Black at Shore Capital said: "Morrisons has had a great year in an operational sense, meeting shoppers’ needs in a time of crisis and materially enhancing the reputation of the group, reflected in a rising shopper satisfaction."