However, the 70-year-old former leader was acquitted on charges of perjury for allegedly falsely declaring his assets.
That will be of little consolation for him or his thousands of supporters, many of whom claim the person that really should have been on trial is the current president, Gloria Arroyo.
Estrada has accused Arroyo of masterminding his removal from office by conspiring with leaders of the Roman Catholic church and senior military officers.
Plea for calm
Tight security was deployed across Manila ahead of the verdict, with riot police and soldiers keeping hundreds of flag-waving Estrada supporters several blocks from the Sandiganbayan court building.
Police also deployed a special "shield force" around the residence of Arroyo, who was advised to remain inside amid warnings of a possible repeat of violent protests seen when Estrada was arrested in 2001.
A spokesman for Arroyo spokesman immediately appealed for calm after the verdict was announced.
Rose to fame as swashbuckling action film star
Held office of mayor in hometown of San Juan for 16 years
Cultivated image of supporter of poor and downtrodden
Won presidency in 1998 in largest ever landslide
Time in office was dogged by allegations of corruption and illegal business ties
Senate impeachment proceedings collapse in early 2001, triggering mass protests and forcing Estrada from office
Estrada later arrested and charged with plundering state funds
"We hope and pray that the rule of law will prevail," Ignacio Bunye said.
"Meantime, we have a country to run, an economy to grow and a peace to win. We hope that this sad episode in our history will not permanently distract us from this goal."
Government fears that a conviction would spark a violent protest from Estrada's supporters - drawn mainly from the Philippines poorer areas -failed to materialise.
Cardinal Gaudencio Rosales, the Roman Catholic archbishop of Manila, said the verdict should be a "constant reminder to the people elected or appointed to serve. The moral in this is 'be moral'".
He said the law should be respected and the appeals process followed "instead of settling the score in the streets or elsewhere".
Escorted from court after the verdict Estrada denounced the trial as a sham, saying the special court was "created to convict me", which he said was already expected.
"This is the only forum where I could tell the Filipino people my innocence," he said.
"That's why I took a gamble. I thought the rule of law will prevail over here. This is really a kangaroo court. This is a political decision."
Plunder is a capital offence, though the death penalty was abolished recently.
Passing its verdict the court ordered that $87m frozen in Estrada's accounts be handed over to the government.
The funds, including protection money from illegal gambling operators, embezzled tobacco taxes, and commissions from insider trading, will be "forfeited", the special anti-graft court said.
Special prosecutor Dennis Villa-Ignacio said the case showed that a public official can be charged, prosecuted and convicted regardless of his stature.
"It shows that our judicial system really works," he said.
Minutes after sentencing, Estrada's lawyer said the former president would appeal the conviction.
"He is going to fight this out," Rufus Rodriguez said. "He will be acquitted in the Supreme Court."
Estrada, known to his supporters as 'Erap', has maintained his innocence claiming the charges were trumped up by political opponents.
His conviction culminates a fall from grace after he rose to stardom during his acting career as a swashbuckling action hero before rising to the pinnacle of political power.
Al Jazeera's Manila correspondent, Marga Ortigas, says that during the past six years under house arrest Estrada has become the main opposition figure against the Arroyo administration.
However she said it is still not enough to unite all the various opposition groups against Arroyo.
With Arroyo facing allegations of corruption in her own government, our correspondent said Wednesday's verdict sends a signal that no one is above the law - and a similar case could await the current president once her term is over.
|The violent protest the government expected did not materialise [AFP]|