The court found on Monday the three-time prime minister was unable to prove the source of income for the ownership of a steel mill in Saudi Arabia, Geo News reported.
He was acquitted on a separate corruption charge.
Sharif was sentenced in July to 10 years in prison by the same court, on charges related to the purchase of upscale apartments in London, after the Supreme Court removed him from power.
He was released from prison in September pending an appeal.
Sharif has denied all the charges against him and says he is being targeted by the country’s powerful security establishment.
Reporting from Islamabad, Al Jazeera’s Kamal Hyder said that Sharif’s party would take the verdict seriously.
“This is indeed something which is going to be taken seriously by his political party. However, it should also be remembered that Nawaz Sharif was earlier arrested in the Avenfield property case, he was sent to prison. He then lodged a review petition and was released on bail,” he said.
“His lawyers, of course, will file an appeal, but it may take some time. He also has to wait for the verdict on this initial appeal in the Avenfield property case.”
Security was tight at the court on Monday, with some clashes breaking out between Sharif’s supporters and security forces.
“There were scuffles with some of his party supporters when he arrived at court, the police resorting to tear gas, but quickly bringing the situation under control,” Hyder reported.
“We are told that over 1,000 policemen, as well as paramilitary forces have been deployed along the main avenues leading to the court.”
Sharif has been prime minister three times.
He was first expelled from office in 1993 on suspicion of corruption. He won an election in 1997, only to be ousted and exiled after a military coup in 1999.
He returned to Pakistan in 2007 and took power once more in 2013 until his ousting last year.