A military court cleared Sergeant 1st Class Tracy Perkins of involuntary manslaughter but found him guilty on charges of assault and obstruction of justice.
The military court also sentenced Perkins to a one-grade reduction in rank to staff sergeant. Perkins faced a possible punishment of up to eleven-and-a-half years in prison and a dishonourable discharge from the army.
Perkins was accused of killing Zaidun Hassun, by having soldiers force him and Hassun's cousin off a bridge across the Tigris river in Iraqi in January 2004.
Marwan Fadil, who was forced off the bridge along with his Hassun, testified that the soldiers tossed the two at gunpoint into the water after they begged for mercy and then laughed as Hassun drowned.
In a voice choked with emotion, Perkins apologised to army officials and his fellow enlisted personnel for the incident.
"I recognise what we did was wrong, and I will accept the punishment given," he told the military court.
Another soldier, 1st Lieutenant Jack Saville, will face a court marital in March for his role in the incident.
Several soldiers in the Perkins trial said Saville gave the direct order to throw the two Iraqis into the Tigris.