Domenico Dolce and Stefano Gabbana have been sentenced to jail in Italy for one year and eight months for tax evasion.
The Italian fashion designers were accused of hiding millions of euros from tax authorities.
Domenico Dolce and Stefano Gabbana, whose customers have included Madonna, Kate Moss and Kylie Minogue, were not at the trial, deny the charges and have appealed.
The designers have not commented on their sentences, which have been suspended pending their appeal.
The investigation by the Italian authorities began around six years ago as part of a government plan to crack down on tax avoidance.
At the hearing on Wednesday, the judge ruled that the designers moved their brand to a Luxembourg-based holding company Gado – an anagram of their two surnames – in 2004.
He said they had done this to avoid declaring taxes on royalties of around 1 billion euros ($1.3 billion).
Prosecutors alleged they sold the business for well below actual market value.
They were initially cleared of the charges at a previous trial in April 2011 but Italy’s highest court overturned that ruling, ordering that the case should be sent back.