"If they absolutely want me to sleep in jail, I will sleep in jail, but with my head held high," he told reporters, adding that he was innocent. "I will not apologise for something I didn't do."
"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 said of the ruling, as his wife, model and singer-songwriter Carla Bruni, stood by him.
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.
"We were shocked (by the sentence) because when we started hearing the decision being read out, we thought his innocence would be recognised," one of his lawyers, Jean-Michel Darrois, told reporters. "We hope the appeals court will see things more clearly and will recognise his innocence."
The prison 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.
That must happen within a month. French media said Sarkozy would be summoned on October 13 to be told when he would be jailed.
Authorities did not disclose where he would be jailed, though people familiar with the French judicial system say it could be in the capital's storied La Sante prison, which in the past has housed leftist militant Carlos the Jackal and former Panamanian dictator Manuel Noriega.
"It's the prison best suited to welcome a profile such as his," said prison guard union representative Wilfried Fonck.
The judge said Sarkozy was guilty of criminal conspiracy between 2005 and 2007 for having let close aides get in touch with people in Libya to try and obtain campaign financing. From May 2007, he was president and covered by presidential immunity, the court added.
It was the second time this year that a French court handed down a ruling with immediate effect on a major political figure.
Far-right leader Marine Le Pen was convicted in March of embezzling EU funds and given an immediate five-year ban on running for office.
Le Pen was prompt to react to Sarkozy's sentencing, saying it was "a grave danger" that judges were opting for immediately enforceable rulings and not waiting for appeals.
Reactions among French politicians were mixed, with several on the right - including Interior Minister Bruno Retailleau - rushing to give support to Sarkozy, while on the left, the ruling was seen as proof of the independence of the judiciary.
Vincent Brengarth, lawyer for economic justice campaign group Sherpa, which was party to the trial, also welcomed the ruling, saying it "confirms we have an independent justice system that can be brave".
On the streets of Paris, reactions were equally mixed.
"I think it's a good thing that Mr. Sarkozy, the former president of France, is being held accountable for his actions," said student Clement Buy.
But others disagreed. "It was the same for Marine Le Pen. We pick fights with people who are involved in politics ... other parties are perhaps afraid (of them), that's all," said pensioner Jacqueline Erman.
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 (RN), saying the far-right, anti-immigrant party now forms part of the "republican arc."
Sarkozy has faced several legal battles since leaving office.
Last year, France's highest court upheld a 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. The tag has now been removed.
Also last year, 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 next month.
