Judges jailed him for four years on Tuesday, but said there was no proof he headed a regional “terrorist” network.
They also convicted Bashir, 65, of an immigration offence.
However, the Muslim leader reacted with defiance to the verdict.
“Just because I am fighting for Islamic Sharia law I am accused of subversion,” said a calm-looking Bashir after the sentence was announced.
“I cannot accept this and I state that I will appeal.”
But he urged his supporters to remain calm after the verdict.
“Be careful of provocateurs, be careful from America,” he said, smiling and waving.
Chief judge Muhammad Saleh said Bashir “has been proven to take part in subversion with the aim of overthrowing the government”.
But he added: “There is not enough evidence to say that the defendant Abu Bakar Bashir is the leader and the organiser of subversion with the intention of overthrowing the government.”
The five judges said there was no proof Bashir heads the Jemaah Islamiyah (JI) group, but added he was part of its struggle.
Bashir was acquitted of trying to
Prosecutors had alleged that Bashir heads the JI, which they accuse of having links to al-Qaeda. They also blame the group for a string of deadly blasts, including last October’s Bali bombing.
Prosecutors said Bashir had waged a “terror” campaign to topple the Indonesian government and to establish an Islamic state. They demanded a minimum 15-year prison term.
However judges said it could not be proven Bashir was the emir of JI, but added he “cannot be separated from the struggle of the JI”.
They said: “The element of initial implementation of subversion has been proven, that is, by the existence of efforts of the JI to set up an Islamic state.”
JI is blamed for a string of bloody attacks, including Indonesian church bombings which killed 19 people in 2000, the Bali blasts last October which killed 202 people, and August’s Jakarta hotel blast that claimed 12 lives.
However, Bashir was not accused over the Bali blasts.
His indictment accused him of approving the Christmas Eve attacks, a foiled bombing campaign in Singapore, and an aborted plot to kill Megawati Sukarnoputri before she became president of Indonesia.
The trial, which began on April 23, was seen as a key test of Indonesia’s willingness to crack down on political Islam.