Marcia Cooke, district judge in Miami, Florida, said in sentencing Padilla that she agreed with the defence that he had been subjected to "harsh" and "extreme environmental stresses'' while held in detention which she took into account in his sentence.
However, the US authorities repeatedly denied the allegations of torture.
Rights groups had also heavily criticised the decision to hold him as an enemy combatant, saying that as he was a US citizen the move was unconstitutional.
They also argued he was only charged criminally because the US supreme court appeared poised to order him either charged or released.
"There is no evidence that these defendants personally maimed, kidnapped or killed anyone in the United States or elsewhere"
Marcia Cooke, US district judge
Padilla was sentenced to a total of 17 years and four months in prison. He could have faced a life sentence.
Cooke also sentenced Hassoun and Jayyousi to 15 years and eight months and 12 years and eight months in prison respectively.
All three men were convicted in August last year of supporting a US-based cell that allegedly channelled recruits and funding to al-Qaeda.
They were also found guilty of conspiring to murder, kidnap and maim people in Afghanistan, Chechnya, Bosnia and other countries between 1993 and 2001.
However, Cooke was quoted by Associated Press news agency as saying there was "no evidence" linking the men to specific acts of terrorism anywhere.
"There is no evidence that these defendants personally maimed, kidnapped or killed anyone in the United States or elsewhere," she said.
Padilla, a former Chicago gang member with criminal convictions, is said to have converted to Islam in prison and was reportedly recruited by Hassoun while attending a mosque in the Florida city of Sunrise.
His arrest at a Chicago airport in 2002 was initially portrayed by the Bush administration as an important victory in the months immediately after the September 11 attacks.
However, much of what Padilla is alleged to have told interrogators during his detention as an enemy combatant could not be used in court because he had no access to a lawyer and was not read his constitutional rights.
It took a protracted battle between civil rights groups and the Bush administration in the courts before he was transferred to civilian custody in 2006.