The pope's former butler, Paolo Gabriele, was convicted Saturday of aggravated theft for leaking confidential papal documents and sentenced to 18 months in prison.
He was also ordered to pay the costs of the trial at the Vatican City courthouse.
The case is the biggest to go before the Vatican court in decades. It has been the subject of intense interest because a book based on the leaked papers revealed claims of corruption within the Roman Catholic Church hierarchy.
Presiding judge Giuseppe Dalla Torre said he was reducing the three-year term requested by the prosecution to 18 months because of mitigating circumstances.
These included the fact that Gabriele had no previous criminal record and his acknowledgment of "having betrayed" the pope's trust, Dalla Torre said, in a reading of the verdict broadcast on Vatican TV.
Gabriele, who could have faced up to eight years in prison, looked relieved as the 18-month sentence was handed down.
It is not yet clear whether the former butler will serve the full sentence in an Italian prison or whether it may be suspended. He could also be pardoned by the pope, of whom he has asked forgiveness for his actions.
Jesuit Father Federico Lombardi, head of the Holy See media office, told journalists at a briefing that Gabriele would remain under house arrest for the time being.
His lawyer has three days time to present an appeal Lombardi said. If an appeal is presented and an appeal trial takes place, Gabriele would remain under house arrest during this time, he said.
"There is a concrete possibility that the pope might pardon him (Gabriele), but it is up to him to decide when and how," Lombardi added.
Prison terms handed down by the court are served in the Italian prison system under an agreement between Vatican City and Italy, since there are no long-term detention facilities within the tiny city-state.
Gabriele had defended his actions as having a moral objective in his final remarks before the jury of three lay judges retired to consider its verdict.
"I feel strongly the conviction inside of me that I did it because of my overwhelming love, I would say visceral, for the Church of Christ and for its visible leader," he told the court. " I repeat, I don't feel like a thief."
His father was also in court Saturday to hear the final arguments.
Defense lawyer Cristiana Arru said she was pleased with the verdict, according to a briefing by the small pool of journalists allowed to attend the trial.
In her closing statement, Arru, who called for the jury to reduce the theft charge to a lesser one, had told the court that while her client's actions were illegal, they were the result of "the evil he saw" within the Church.
Arru told the court that Gabriele's actions were morally motivated and that she hoped that "one day they will be recognized and applauded."
The court heard this week how police found more than 1,000 important documents among a stash of hundreds of thousands of papers in Gabriele's apartments in Vatican City and Castel Gondolfo, a town near Rome.
Among them were original papers signed by Pope Benedict XVI, some of them stamped with an order for destruction, according to the journalists allowed to attend the trial.
Also found in his possession were a gold nugget belonging to the pope, a signed check made out to Pope Benedict XVI for 100,000 euros and an original version of Virgil's Aeneid from 1581.
In his testimony Tuesday, the former butler declared himself not guilty of a charge of aggravated theft in connection with the leaked documents -- but said he had abused the pope's trust.
He told how he had photocopied many confidential papal papers, saying he did so because he wanted to expose wrongdoing and corruption.
Observers say that despite the trial, questions remain about how Gabriele managed to remove such confidential and potentially damaging documents from Vatican City.
There is also continued speculation over whether someone high up in the Church, perhaps a cardinal, may have helped him, although Gabriele denied having an accomplice.
Some of the private documents contained allegations of financial corruption, claims the Vatican might have preferred to keep under wraps.