Stephanie Foray, 30, went missing on Tioman island off the east coast state of Pahang in May 2011.
Her partially mummified remains were found some three months later buried in a cave on the island.
The verdict comes just weeks after another foreign tourist, British backpacker Gareth Huntley, went missing on the same island during a trek in circumstances that have yet to be fully explained.
A high court in Pahang's capital Kuantan found Asni Omar, 39, who operated a shop selling beach gear on the island, guilty of killing Foray.
After the death sentence was handed down, Foray's mother, Irene Mortel, got up, looked at Asni and wept.
"I was hoping for nothing else. That's all... I know it can't change anything," she said of the verdict as she left the court, together with Foray's father, Joel, who travelled to Malaysia with her.
In delivering the verdict, judge Mariana Yahya said the defence failed to raise reasonable doubt, adding Asni had "weakened his own defence" by merely presenting a "well arranged story" to deny his guilt.
Asni, who was sitting in dock with short shaved hair and wearing a dark blue shirt with white stripes and jeans, was hugged by crying family members before being led out of the court by police.
Murder carries the mandatory death penalty by hanging in Malaysia.
Asni's lawyers said they would appeal the sentence to a higher court.
Asni was accused of killing Foray, a French civil service employee, after she spurned his advances.
The murder of Foray shocked people in the Muslim-majority country where violent crime against tourists is rare.
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