Ehud Olmert was convicted in what is known as the “Holyland affair” in which bribes were paid and received to speed up a luxury property development.
The 68-year-old former prime minister has already been cleared in several other corruption trials.
He had denied wrongdoing and had hinted at a political comeback.
Delivering the verdict in Tel Aviv on Monday, Judge David Rozen said the case “exposed governance that grew more corrupt and rotten over the years”, with bribes paid to public officials,” the Associated Press news agency reported.
Former Kadima party leader Ehud Olmert succeeded Ariel Sharon as prime minister after the latter had a stroke in January 2006. He was mayor of Jerusalem from 1993 to 2003.
In 2012, Ehud Olmert was cleared of two major corruption charges but convicted of illegally granting favors to a business friend during his time as trade and industry minister under Ariel Sharon.
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