Andrea Berg, country manager for Human Rights Watch, said: "The judge read out what the prosecution had concluded - that she crossed the border and that her computer contained material that represented a security threat."
New York-based Human Rights Watch says Niyazova's case is politically motivated and linked to articles she wrote about the killing of protesters in Andizhan.
Niyazova pleaded guilty only on one count, that of illegally crossing the border.
On Wednesday the Uzbek foreign ministry defended the verdict, saying "Niyazova had financed different unregistered non-governmental organisations and rights groups operating in Uzbekistan."
Niyazova was "receiving money from a number of foreign diplomatic representative offices," said a foreign ministry statement.
"These facts could be considered as an attempt to interfere in the internal affairs of a sovereign state."
|Hundreds were killed in an uprising in Andizhan in 2005 [EPA]|
The government of Islam Karimov, the president, has put pressure on non-governmental organisations and journalists since its troops quashed an uprising in Andizhan, killing hundreds, according to witnesses.
The government has said only 187 people died in Andizhan, all of them either "terrorists" or its own troops.
Following the Andizhan killings, the European Union imposed sanctions including a ban on arms sales to Uzbekistan.
The measures are due to be reviewed this month and some EU member states have argued in favour of lifting them, saying that the Uzbek government has made progress by agreeing to talk with them about human rights.
According to Human Rights Watch, the material on Niyazova's computer that was deemed "extremist" by the prosecution was a Human Rights Watch report on the Andizhan killings and an article by an independent Uzbek journalist.
Before her arrest, Niyazova had fled to Kyrgyzstan to seek political asylum, her supporters say.
She was arrested returning to her home country without a passport - which had been confiscated by Uzbek officials before she fled.
Last week another witness to the Andizhan killings, Gulbahor Turayeva, a local human rights activist, was jailed for six years on charges including anti-constitutional activities.
Turayeva, who is also a doctor, had told reporters after the Andizhan events that she had seen about 500 bodies there including those of women and children.