Despite Zhao Yan's imprisonment, his lawyer Guan Anping said on Friday: "This is a big victory. It's a victory for us and a victory for the legal system in China."
The maximum penalty for charges of leaking state secrets is death and even though that was considered highly unlikely, Zhao's defence team had said before the verdict that he could have been jailed for 10 years.
The court in Beijing ruled that there was not sufficient evidence to convict him on the state secrets charge.
The government did not release details of the charges.
Zhao, 44, was taken into police custody in September 2004 after the New York Times correctly reported that Jiang Zemin, the former president, was about to resign from his last official post as the head of the military.
At the time, Jiang's retirement was a closely guarded state secret, although it was widely expected.
Zhao was charged with leaking state secrets to the newspaper, which he and the New York Times always denied.
He had similarly maintained his innocence on the fraud charge, which was not related to the state secrets' accusation.
Zhao's case had caused a diplomatic row between China and the United States, with Washington repeatedly calling on Beijing to release him.
International human rights groups have also demanded his release and critics see it as an attempt by Chinese authorities to intimidate reporters.
Before joining The Times' Beijing bureau, Zhao was an investigative reporter for Chinese publications and wrote about complaints of official corruption and abuses in the countryside.