The 64-year-old former rising star in the Socialist Party was also accused of under-declaring the value of his fortune when he took up his ministerial post in 2012 with a remit that included cracking down on tax evasion.
On Thursday Judges agreed with prosecutors who had called for a three-year jail term and a two-year sentence for his co-defendant and ex-wife, dermatologist Patricia Menard.
Cahuzac immediately announced he would appeal the verdict, meaning he would not go straight to prison.
The pair, who ran a hair transplant clinic with a client list featuring members of Paris's high society, have already paid back taxes and penalties totalling some 2.5 million euros ($2.8 million).
In closing arguments in the trial in September, Cahuzac's defence lawyer Jean Veil noted his client had already made financial amends and said he had "no desire to see my taxes going towards maintaining Jerome Cahuzac" in jail.
But prosecutor Jean-Marc Toublanc said Cahuzac's family life "was rooted in fraud for 20 years".
Cahuzac, a trained plastic surgeon, told the court that he stashed funds offshore to maintain his family's standard of living -- which included buying apartments for the children in London and Paris and paying for holidays in Mauritius.
Like a crime novel
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The story of the fraud perpetrated between 1992 and 2013, reads like a cross between a cheap airport novel and an international financial crime manual.
In one episode, Cahuzac, using the codename "Birdie", allegedly received two cash payments of 10,000 euros on the streets of Paris.
The couple used a Royal Bank of Scotland account in the Isle of Man, an offshore financial centre in the Irish Sea, to channel cheques from English hair transplant clients.
As their marriage began to falter, Menard also opened an account in Switzerland.
Menard's lawyer Sebastien Schapira said the money was "that of fraud, but initially it was that of her work, earned day after day, hour after hour, hair by hair".
He described Menard as "naive", an unwitting accomplice who was "swept up" in the fraud before confessing to it in December 2013.
She testified that the couple had become locked in a "spiral" of wrongdoing.
"I'm extremely ashamed of having done all that," she said.
The scandal was the first of a series that have tarnished Francois Hollande's presidency and prompted him to order his ministers to disclose their personal wealth, a first in France, where the wealth of public officials had long been considered a private matter.
Cahuzac initially denied the allegations and sued the Mediapart news website that broke the story in 2012.
Footage of the minister lying to parliament was repeated in an endless loop on French media after he finally confessed in April 2013, "consumed by remorse", to holding a Swiss bank account.
But by the end of the trial, Cahuzac had repeatedly admitted his "inexcusable wrongdoing".
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