Sarkozy, 70, was expected to leave Paris' La Santé prison in the afternoon.
He will be banned from leaving the French territory and from being in touch with key people including co-defendants and witnesses in the case, the court said. An appeals trial is expected to take place later, possibly in the spring.
Sarkozy became the first former French head of state in modern times to be sent behind bars after his conviction on September 25. He denies wrongdoing. He was jailed on October 21 pending appeal but immediately filed for early release.
During Monday's hearing, Sarkozy, speaking from prison via video conference, argued he has always met all justice requirements.
"I had never imagined I would experience prison at 70. This ordeal was imposed on me, and I lived through it. It's hard, very hard,” he said.
Sarkozy also paid tribute to prison staff who he said helped him through “this nightmare." Sarkozy's wife, supermodel-turned-singer Carla Bruni-Sarkozy, and two of his sons, attended the hearing at the Paris courthouse.
Monday's proceedings didn't involve the motives for the sentencing.
Still, Sarkozy told the court he never asked Libya's longtime ruler Moammar Gadhafi for any financing. “I will never admit something I didn't do,” he said.
Under French law, release is the general rule pending appeal, while detention remains the exception.
The former president, who governed from 2007 to 2012, faces separate proceedings, including a November 26 ruling by France's highest court over illegal financing of his failed 2012 reelection bid, and an ongoing investigation into alleged witness tampering in the Libya case.
In 2023, he was found guilty of corruption and influence peddling for trying to bribe a magistrate in exchange for information about a legal case in which he was implicated. France's highest court, the Court of Cassation, later upheld the verdict.