François Fillon was sentenced to five years in prison, three of which were suspended, meaning he will spend two years behind bars.
He was also handed a €375,000 fine and banned from public office for 10 years.
His wife, Penelope Fillon, 64, was handed a three-year suspended sentence and the same fine. Her lawyer described the punishment as “extremely severe”.
The verdict was a long-awaited end to a political scandal that began when François Fillon, 66, was accused of creating a post that paid his wife over one million euros in public funds, a scandal that torpedoed his 2017 presidential bid.
The then-leader of the conservative party Les Républicains was widely tipped to win the presidency when the French Canard Enchaine newspaper reported that Penelope Fillon had been his parliamentary assistant for 15 years – except there was no evidence that she did any work.
In its verdict the court concluded that the payment Penelope Fillon had received “was not in proportion with her activities.”
“Her role was limited to simple transmission”, said the president of the court.
To defend herself from the accusations against her, Penelope Fillon told the court she had spent a lot of time sorting her husband's mail, attending public events near their rural manor and gathering information for his speeches.
But investigators seized on a 2016 newspaper interview in which she said: “Until now, I have never got involved in my husband's political life.”
At the height of the scandal in January 2017, François Fillon had told the media his wife's salary was “perfectly justified for the indispensable work she did for him.”
After the verdict his lawyer said the court's decision was “unjust” and announced his intention to appeal.
“There will be a new trial, which is necessary given the ludicrous conditions in which the investigation took place and the surprising conditions in which the investigation was carried out,” said Fillon's lawyer Antonin Lévy.
“Penelopegate”, as the case was known, is one of a number of fraud cases against senior politicians opened in recent months and seen by some as a test of whether the French elite can be held accountable.
The revelations dealt a body blow to François Fillon's carefully honed image as a stern budgetary steward, despite his insistence that his wife had earned the €1.05 million she was paid from 1998 to 2013.
It later emerged Fillon had also used public money to pay two of his children a combined 117,000 euros for alleged sham work while he was a senator, before becoming premier in the government of then-president Nicolas Sarkozy.
The allegations that François Fillon had pilfered the public coffers for years pummelled his image as an upright fiscal hawk promising to right the country's finances – and loomed large in the “yellow vest” anti-government protests that rocked the country in 2018-2019.
François Fillon has repeatedly insisted that he was set up for “political assassination” by his rivals and was also the victim of a biased judiciary.
François Fillon’s lawyer said they would appeal the court's decision.
A third defendant, Marc Joulaud – who stood in for Fillon in parliament when he was a cabinet minister, and who also hired Penelope Fillon as an assistant – was also found guilty and handed a three year suspended sentence.