A committee of judges at the court handed down the ruling with a majority vote on Thaksin who was found guilty of malfeasance and violation of a law on the wrongdoing of government officials.
According to Bangkok Post, the case involves a lottery scheme that Thaksin opened from August 1, 2003 to September 16, 2006 when he was prime minister.
He was among the 47 defendants in the case and the case against him had been shelved after Thaksin fled the country in 2008.
The National Anti-Corruption Commission (NACC) sought the trial against him in absentia last year.
His lottery programme caused total losses of THB1.67 billion (over US$53 million).
Apart from giving the jail sentence, the court also ordered a warrant for the arrest of Thaksin.
In 2008, the court sentenced Thaksin to two years in jail for having a conflict of interest after his ex-wife won a bidding contest to buy a state-owned land plot in inner Bangkok while he was prime minister in 2003. The 10-year statute of limitations of the case expired in October last year.
On April 23, the court sentenced him to three years in jail for ordering the Export-Import Bank of Thailand to additionally lend 1 billion THB to Myanmar below cost for the benefits of his family's Shin Satellite Plc.