Navalny was detained when he returned to Russia last year, after surviving a poisoning he blamed on the Kremlin.
He is already serving three and a half years in jail for breaking bail conditions while in hospital.
A judge has now found him guilty of fraud and contempt of court.
Prosecutors accused him of stealing $4.7m (£3.5m) of donations given to his now banned organisations, including his anti-corruption foundation.
Delivering her verdict, Judge Margarita Kotova said Navalny had carried out “the theft of property by an organised group”.
A visibly gaunt Navalny folded his arms and exchanged comments with his lawyer as the ruling was read out.
Shortly after the sentence was announced, Navalny’s lawyers were bundled into a police bus and briefly detained.
No room for dissent in Putin’s Russia
This verdict will not come as a surprise to those who have watched Alexei Navalny’s case.
His FBK anti-corruption foundation was declared extremist, he was poisoned and he was already imprisoned. Now he faces being barred from public life for almost a decade.
Russia’s crackdown on any platform that contradicts the Kremlin’s line continues.
Meta, the company that owns Instagram and Facebook, has been declared an extremist organisation; more media outlets are regularly blocked and a new law that can lead to up to 15 years in jail for anything the authorities consider to be fake news about the military has led many independent journalists to leave the country.
There is no space for dissent against President Putin in today’s Russia.
The trial was held at the penal colony in Pokrov where Navalny was sent last year after being jailed for failing to observe bail conditions, while he was being given life-saving treatment in Berlin for the August 2020 nerve agent attack.
Navalny’s spokeswoman Kira Yarmysh said that while the attention of the world was focused on Ukraine, “another monstrous crime was being committed inside of Russia”. His colleagues alleged that the judge had discussed the trial with the Kremlin in recent weeks.
Ms Yarmysh said it was not just his freedom that was at stake but his life as well, because his accusers had already tried to kill him in Siberia.
The trial has been dismissed as a sham by Amnesty International, while German Chancellor Olaf Scholz has condemned it as incompatible with the rule of law.
Navalny’s top aide, Leonid Volkov, said President Putin had come up with many plans, including the capture of Kyiv in 96 hours, and his plans always ended in failure: “So it will be with these nine years.”
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