Deadline reports that the streaming service spent $10 million (£7.7 million) on the documentary, which received the festival's Festival Favourite Award.
The publication notes that the sale marks the most amount of money ever spent on a documentary at a film festival.
Directed by Rachel Lears, the film follows Democratic candidate Ocasio-Cortez, along with three other candidates, who were running against incumbents last year.
Knock Down the House was one of several documentaries to sell for millions at Sundance. Hulu bought The Untitled Amazing Johnathan Documentary, about the final tour of a dying musician for $2 million (£1.5 million), while Netflix spent $3 million (£1.5 million) American Factory, about a Chinese billionaire who revamps General Motors plant into a new factory.
Other sells include the Leonardo DiCaprio-produced Sea of Shadows to NatGeo, Sony Pictures Classics purchasing David Crosby documentary Remember My Name, and Showtime buying the Wu-Tang Clan's Of Mics And Men.
Ocasio-Cortez, who represents New York’s 14th congressional district, worked as a bartender before thrashing Democrat stalwart Joe Crowley – the 10-term representative and then-fourth-ranking Democrat in the House.
The self-avowed socialist, from the South Bronx, had also previously worked as a waitress, children’s book publisher, community activist, a member of the Democratic Socialists of America and volunteered for Bernie Sanders during his 2016 presidential campaign.