His two sons, 53-year-old Alaa Mubarak and 50-year-old Gamal Mubarak - were also convicted and given four-year terms for embezzling USD 17.9 million of funds earmarked for the renovation of presidential palaces.
"The court orders Mohamed Hosni Mubarak to be sent to jail for three years," judge Osama Shaheen said as Mubarak sat in the caged dock in a wheelchair, wearing a grey suit, looking sombre but alert. His sons stood beside him in white prison uniforms.
The trio denied the charge and asserted at the trial that the prosecution's case was "completely unsubstantiated because it never happened".
They were also fined USD 17.6 million and ordered to reimburse USD 2.9 million to the state treasury.
Four other defendants were acquitted in the case.
One of the Mubaraks' lawyers, Mostafa Ali As, said they would appeal. It was not immediately clear whether the 23 months that Mubarak and his sons have spent in custody would count towards their sentences.
Mubarak, who ruled Egypt for three decades, is also facing trial for abuse of power and conspiring in the killing of protesters during the 2011 uprising that forced him to quit.
He was found guilty of the charge relating to the protesters in 2012 along with his former Interior Minister, Habib al-Adly, and sentenced to life in prison.
But in January 2013, a court upheld an appeal by them against their convictions and ordered a retrial.
The conviction comes just a few days before a presidential election that former military chief Abdul Fattah al-Sisi, who served as military intelligence chief under Mubarak, is widely expected to win.
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