According to El Pais newspaper, Urdangarin was sentenced to six years and three months in prison for embezzlement and fraud, among other charges.
Despite being cleared, Cristina has been ordered to pay a €265,000 fine (nearly £230,000) as the court believed she had indirectly benefited, albeit unknowingly, from her husband's fraud.
Asked by her defence lawyer why she became the co-proprietor of a company called Aizoon through which illegal funds were funnelled into their personal accounts, Princess Cristina said it had been Mr Urdangarin's idea and she had agreed: "Out of trust".
Urdangarin, who had faced a maximum jail term of 19-and-a-half years, will be able to appeal the ruling in the country's Supreme Court.
Urdangarin, a former Olympic handball player, had used his royal connections to win public contracts to put on events through his non-profit organisation, the Noos Foundation, then overcharged for the events and hidden millions of dollars in proceeds overseas, according to prosecutors.
Urdangarin, a 49-year-old businessman and former Olympic handball player, had been accused of taking advantage of his his royal connections to win inflated public contracts to stage sporting and other events and then siphoning off the proceeds to fund a lavish lifestyle.
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She was the first member of Spain's royal family to face criminal charges since the monarchy was restored in 1975. Both have lived in Switzerland with their four children since 2013, and have always denied any wrongdoing.
Some of the foundation's money was transferred to a private company and used to pay for family holidays, home furnishings and theatre tickets, prosecutors said.
In 2015, King Felipe VI stripped his sister of her title, Duchess of Palma, which she inherited by royal decree in 1997.
The investigation heightened the impression among Spaniards that the royal family was out of touch with ordinary people just as Spain was suffering its worst recession of modern times. King Juan Carlos, the father of Felipe and Cristina, abdicated in 2014 as the investigation into the scandal played out.
Princess Cristina is sixth in succession to the throne.