The case was a retrial of the former politician's acquittal of the charges in 2012. Last year he was also sentenced to six years for accepting bribes from a US businessman.
Serving from 2006 to 2009, the Kadima politician was forced to resign from the country's top position when allegations of his past fraudulence arose. Despite high profile characters such as Tony Blair and former Mossad chief Meir Dagan testifying in his favour, Olmert was found guilty of accepting bribes in 2014 and sentenced to six years.
Olmert is said to have accepted cash-stuffed envelopes from US businessman Morris Talansky while serving as Mayor of Jerusalem.
Talansky's bribes, which exceeded $600,000, were supposedly made in relation to a controversial "Holyland" housing project in Jerusalem and for undisclosed "political reasons" during Olmert's tenure as mayor.
"He was the guest of my credit card," Talansky said. "I only know that he loved expensive cigars. I know he loved pens, watches. I found it strange."
In addition to the prison sentence, the former PM was fined 100,000 shekels (£16,000). He has not yet served any time in prison, having been granted his freedom while appeals are made against the rulings.
Olmert still denies any wrongdoing, claiming the case is "a brutal, ruthless witch-hunt", and his legal team plan to fight the decision in Israel's Supreme Court.