A court in Paris sentenced Fillon, 66, to five years in jail, three of which were suspended although he remains free pending an appeal.
Defence lawyers struggled at the trial this year to provide documented proof that she actually did any work - and the head of the magazine, Marc Ladreit de Lacharriere, had already pleaded guilty to the fake job charges. His wife, who had been paid some €500,000 ($563,860) between 1992 and 2002 from the money made available to her husband by the French government, also received a suspended three-year sentence and was ordered to pay €375,000 as well.
In January 2017, Fillon was on a fast track to become France's next leader in a presidential election in which he was the clear favourite to win. Immediately afterwards, the couple, who had denied the accusations, said they would appeal against the verdict.
Mr Fillon was tried on charges he orchestrated a fake job as parliamentary assistant for his wife, which paid her over a million euros in public funds.
Fillon was accused of misuse of public funds, receiving money from the misuse of public funds and the misappropriation of company assets.
The court ordered the Fillons to pay 401,000 euros in damages to the National Assembly, and told Penelope Fillon and Joulaud to pay a further 679,000 euros.
Levy said the sentence was unfair, that there was a conspiracy against the couple and promised there would be a new trial.
Fillon served as prime minister under president Nicolas Sarkozy from 2007 to 2012.
The court also convicted Fillon's wife of complicity to embezzle and hide of public money.
Prosecutors had pointed to the lack of actual evidence of her work, including the absence of declarations for any paid vacations or maternity leave.
Fillon met his Welsh-born wife while she was studying at the Sorbonne in Paris, and the couple soon married and moved to an imposing country estate near Le Mans where they raised their five children.
Prosecutors denounced "fraudulent, systematic practices".
The court did not order the arrest of either François or Penelope Fillon.
But investigators seized on a 2016 newspaper interview in which she said: "Until now, I have never got involved in my husband's political life".
Fillon insists he was set up for "political assassination" by his rivals and was also the victim of a biased judiciary.