Hundreds of Ba'asyir's supporters had gathered outside court in Jakarta, and some wept when they heard the verdict.
The preacher was convicted of giving support to militants in Aceh province who were plotting to impose Sharia law in Indonesia through a campaign of violence and murder.
Ba'asyir, 72, has been involved in radical groups for decades.
Over the years, he has been repeatedly arrested, jailed and then released.
He spent more than two years in jail for helping to inspire the bombers who killed more than 200 people in Bali - but he was later cleared on appeal.
Peter Hughes, an Australian who survived the Bali bombing, told ABC News that Thursday's verdict was a "fantastic result".
"The guilty verdict sort of says it all. This guy was the mastermind behind the Bali bombing... he can rot in jail as far as I'm concerned," he said.
The BBC's Karishma Vaswani in Jakarta says it is debatable whether the verdict will have much impact on the fight against terrorism in Indonesia.
Continue reading the main story Karishma Vaswani BBC News, JakartaSupporters of Abu Bakar Ba'asyir arrived at the courthouse in south Jakarta hours before the judges began reading out the verdict on the 72-year-old preacher.
He needs no introduction to Indonesians - he is a familiar face here. He is believed to be the spiritual influence behind radical Islamic groups in the country.
He has faced terrorism charges before. In fact, this is the third time he has been on trial for his alleged participation in extremist activities.
The police weren't taking any chances and deployed 3,000 officers at the court, as well as stepping up security around police headquarters.
Ba'asyir can continue to preach his message even from his prison cell, our correspondent says.He was arrested by anti-terror police last August, months after the Aceh training camp was raided.
The discovery of the camp has so far led to the arrests of more than 120 terrorism suspects over several months.
The Aceh camp drew together militants from several different jihadi groups.
Experts believe they were planning to form a militia to kill government officials, moderate Muslims and influential non-Muslims.
Ba'asyir has repeatedly said the allegations against him were "engineered by America", and his lawyer promised to appeal against the conviction.
Most analysts agree that he has been the spiritual leader of the military jihadi network Jemaah Islamiah for a number of years.
But he was cleared of involvement with the group after a trial in 2003.
Indonesia terrorism expert Sidney Jones said his influence had waned in recent years, and his supporters now numbered in the hundreds rather than the thousands.
"It's important that he's been put away but it doesn't mean that there's a major change in the level of the security threat in Indonesia. It's not strengthened. It's not diminished," she told the BBC.
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