The sentence was harsher than many expected, and a first in modern French political history.
Sarkozy, who was president between 2007 and 2012, will spend time in jail even if he appeals the ruling.
As he exited the courtroom on Thursday, Sarkozy expressed his anger at the ruling.
"What happened today ... is of extreme gravity in regard to the rule of law, and for the trust one can have in the justice system," he told reporters.
"If they absolutely want me to sleep in jail, I will sleep in jail, but with my head held high," he said, adding that he was innocent and the ruling was scandalous.
Sarkozy was found guilty of criminal conspiracy over efforts by close aides to procure funds for his 2007 presidential bid from Libya during the rule of late dictator Muammar Gaddafi.
He was acquitted by the Paris court of all other charges, including corruption and receiving illegal campaign financing.
However, the jail sentence is enforceable immediately, with the judge saying Sarkozy would have just a short period to put his affairs in order before prosecutors call on him to head to jail.
Sarkozy, who has always denied the charges, was accused of making a deal with Gaddafi in 2005, when he was France's interior minister, to obtain campaign financing in exchange for supporting the then-isolated Libyan government on the international stage.
The judge said there was no proof that Sarkozy made such a deal with Gaddafi, nor that money that was sent from Libya reached Sarkozy's campaign coffers, even if the timing was "compatible" and the paths the money went through were "very opaque".
But she said Sarkozy was guilty of criminal conspiracy for having let close aides get in touch with people in Libya to try and obtain campaign financing.
The 70-year-old has been on trial since January, in a case he said was politically motivated.
The court found him guilty of criminal conspiracy between 2005 and 2007, after which he was president and covered by presidential immunity.
That was the second time in 2025 that a court handed down a ruling with immediate effect on a major political figure.
A court convicted far-right leader Marine Le Pen in March of embezzling EU funds, handing her an immediate five-year ban on running for office.
Despite his legal battles, and having his Legion of Honour, France's highest distinction, stripped in June, Sarkozy remains an influential figure on the French political stage.
He recently met with his former protege, Prime Minister Sebastien Lecornu, and has also lent credibility to Le Pen's National Rally, saying the far-right, anti-immigrant party now forms part of the "republican arc".
Sarkozy has faced several legal battles since leaving office.
In 2024, France's highest court upheld his conviction for corruption and influence peddling, ordering him to wear an electronic tag for a year, a first for a former French head of state.
Also in 2024, an appeals court confirmed a separate conviction for illegal campaign financing over his failed re-election bid in 2012.
A final ruling from France's highest court is expected on that case in October.
