This verdict was a 3.5-year jail term for the Rashtriya Janata Dal (RJD) chief in connection with the case.
The special CBI court judge, Shivpal Singh, earlier in the day, also slapped Lalu with a fine of Rs 5 lakh.
Lalu has been sentenced in the case relating to embezzling of more than Rs 89 lakh from the Deoghar Treasury between 1991 and 1994.
The court also said his jail term would extend by six months, if he failed to furnish the amount.
On December 3, the court had pronounced Lalu and 14 others guilty in the case. Seven other accused were acquitted including former Bihar chief minister Jagannath Mishra.
Lalu Prasad had, on Friday, sought a minimum punishment citing health issues. In his plea, Lalu mentioned, "I have no role in this scam directly; consider minimum punishment keeping in view my age and on health grounds."
The court was scheduled to pronounce quantum of sentence on January 3, but it continued to be deferred till today.
The court had also found Lalu's son Tejashwi Yadav and other party leaders Raghuvansh Prasad Singh and Manoj Jha guilty of contempt of court.
The judge also accused Lalu's family members - his sons, Tej Pratap and Tejashwi - of mouthing casteist statements.
The judge added, "Laluji, we are getting a lot of references and calls for you, but I told your men that I will take the decision the way I want to, following the law."