Oscar Jenkins, 33, was found guilty by a court of taking part in an armed conflict as a mercenary, said a statement on Friday from prosecutors in a part of eastern Ukraine controlled by Russia.
The court ruled he took part in combat operations against Russian troops between March and December 2024.
Mr Jenkins, a teacher from Melbourne, was serving with Ukraine's military when he was captured by Russian forces.
Foreign Minister Penny Wong said the Australian government was appalled at what she described as a "sham trial".
"As a full serving member of the regular Armed Forces of Ukraine, Mr Jenkins is a prisoner of war," said a statement released on Saturday.
Senator Wong urged Russian authorities to give Mr Jenkins the protections afforded to him as a prisoner of war, including treating him humanely in accordance with international humanitarian law.
"We are working with Ukraine and other partners, including the International Committee of the Red Cross, to advocate for his welfare and release," the statement continued.
Ukrainian Ambassador to Australia Vasyl Myroshnychenko has previously said his government added Mr Jenkins to its list of PoWs and would negotiate for his release in an exchange.
Prime Minister Anthony Albanese has also said Australia has made representations to Ukraine, including a one-on-one discussion he had with Ukrainian President Volodymyr Zelenskiy.
Victorian Premier Jacinta Allan on Saturday said she stood ready to support the Jenkins family "who are no doubt going through a really difficult and challenging time".
"We stand ready to provide whatever support is required to both the family and the federal government as they work through what is a really difficult and challenging set of circumstances," she said in a statement.
More than three years have passed since Russia launched its invasion of Ukraine on February 24, 2022.
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