Numerous publications on Tuesday claimed Muhammad Binshiku's jailing was aimed at silencing a critical press.
Binshiku, editor of Algerian newspaper Le Matin and outspoken political commentator, was found guilty of violating a law governing the movement of capital when he was caught at Algiers international airport in August last year with $167,000 in cheques.
Algeria's Finance Ministry brought the case against him.
"He was sentenced to two years in prison, the prosecutor wanted five years, we shall not keep silent," said Le Matin editor-in-chief Yusuf Razzuk.
The stiff sentence for one of the North African country's most outspoken newsmen surprised Western diplomats and editors.
"For me it's a shock, I think Binshiku was judged as a journalist not as a citizen.
"An ordinary citizen would not have received such a sentence," said Ali Jarri, director of Algeria's largest daily newspaper, al-Khabar. "We'll do everything to stop this injustice against the press."
"We'll do everything to stop this injustice against the press"
director of al-Khabar newspaper
Binshiku also plans to appeal the verdict.
He said the cheques he was caught with were personal funds carried for safety rather than depositing them.
He also claimed they could not be cashed abroad.
Algeria has some of the freest print media in the Arab world. But human rights groups have complained recently of an escalating crackdown on media criticism.
Last week, another journalist was jailed also for two months for defaming local officials over the hospital deaths of 13 premature babies.
Binshicu and the Algiers administration have been at odds for over a year.
Generally considered public enemy number one in the media by government officials, the editor also published a critical book on the administration of President Abd al-Aziz Butaflika and on his personal rule.
The government, which distanced itself from the case, has often complained Le Matin was breaking the boundaries of decent journalism with unsubstantiated attacks on the authorities.