Tang Yong Jian, 40, was ordered to pay 20 million shillings or else go to jail for seven years. He was arrested last week carrying an ivory tusk weighing 3.4 kilogrammes in a suitcase while in transit from Mozambique to China via Nairobi.
A spokesman for the Kenya Wildlife Service, which manages the country's celebrated national parks, welcomed the verdict.
"It's a landmark ruling that sets a precedent for those involved in smuggling," Paul Udoto told AFP, saying stricter sentences will make the "killing of wildlife a high cost business".
"It's very motivating for our rangers" to see poachers "lose a lot of money and spend long terms in Kenyan prisons," he said.
Kenya is a key transit point for ivory smuggled from across the region.
Poaching has risen sharply in Africa in recent years, with rhinos and elephants particularly hard-hit.
Under the new law, which came into force a month ago, dealing in wildlife trophies carries a minimum fine of a million shillings or a minimum jail sentence of five years, or both.
Previously, punishment for the most serious wildlife crimes was capped at a maximum fine of 40,000 Kenyan shillings ,and a possible jail term of up to 10 years.
Some smugglers caught in Kenya with a haul of ivory were even fined less than a dollar apiece.
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