Yingluck's administration was toppled in a 2014 coup and she was later put on trial for negligence over her government's rice subsidy scheme, which is said to have cost billions of dollars.
Yingluck was due to hear the verdict on August 25, but failed to show up, surprising hundreds of supporters who had gathered at the court.
Yingluck was found to have had knowledge of the corruption after she removed a former commerce minister after questions arose about rice dealings with Chinese enterprises.
The scheme hit Thailand's rice exports, leading to an estimated loss the military government says was at least $8bn.
She was also impeached for the same charges, and not allowed to participate in Thai politics for five years. "Therefore, the action of the accused is considered negligence of duty".
However, the judges did not offer an explanation for why Yingluck was sentenced to five years. "If it is not dissolved and if its leader is more compromising, then maybe Thailand can move on", he said.
The court's statement said both the defendant and prosecution had the right to appeal on the grounds of both legal procedures and evidence to the Supreme Court within 30 days, according to the new 2017 Constitution.
Due to her no-show last month, the court postponed the verdict to Wednesday.
Neither Yingluck or Thaksin commented publicly immediately after the verdict.
Photos posted on Instagram this week by one of Thaksin's daughters show Thaksin in London. "I do not know". The military seized power.