Navalny is convicted of refraining from reporting to his supervisor after he was in a coma in Germany due to poisoning.
He was conditionally sentenced to embezzlement in 2014.
The sentence is shortened by one year, to just over 2.5 years, for the time he has been under house arrest.
Several countries, including the United States, Britain and Germany, have reacted to the ruling and are demanding the release of Navalny.
Navalny himself and his supporters believe the prosecution, which has provoked protests across the country, is politically motivated.