Yingluck Shinawatra, whose government was toppled by a coup in 2014, missed a verdict in her negligence trial last month.
"The court found that the defendant is guilty as charged. the court has sentenced her to 5 years in prison and the court also unanimously agreed that the sentence will not be suspended", a judge said.
Analysts say Yingluck likely cut a deal with the military leaders, who are bent on erasing her powerful clan from the political scene.
He said it is the power of the court to announce the verdict in Yingluck's case on Wednesday while it remains to be seen whether or not she will show up.
The court said that although Shinawatra herself did not profit from it, she did not stop the corruption happening under her watch.
Yingluck had faced up to 10 years in prison for negligence over the costly scheme that had helped get her elected in 2011.
50-year-old Shinawatra was found guilty of causing losses to the state amounting to €6.8 billion by issuing subsidies for growing rice.
According to media reports, she is widely believed to have fled to Dubai where her billionaire brother, ousted prime minister Thaksin Shinawatra is living in self-imposed exile.
That was far fewer than on Aug 25, when the court was originally scheduled to deliver its verdict, only to find out that Yingluck had fled the country.
Commenting on Yingluck's whereabout, Prime Minister Gen Prayut Chan-o-cha said Yesterday he has information about her whereabout but would not disclose until after the verdict is read today.