The court also ruled Nikolayev could not occupy any top administrative posts for the next three years. Prosecutors earlier demanded he be given a five-year prison term.
Nikolayev, who pleaded guilty on all charges against him, was released from custody in the court room after the verdict was announced.
The former mayor was detained in early March in Moscow and transferred to Vladivostok where a district court ordered his arrest.
Prosecutors said that while Nikolayev was not entitled to bodyguard protection, in September 2004 he signed a contract for armed bodyguards, and in September 2005 he illegally signed a contract to protect city administration property.
Both contracts were financed from the Far Eastern city's budget and between September 28, 2004 and January 31, 2007, a total of 4,400,000 rubles ($170,000) was illegally paid out.
Prosecutors said that during his trips around the city, Nikolayev's car would be accompanied by a column of police cars, in violation of the law, and that some 600,000 rubles ($23,000) from the city budget was used to pay for the police escorts in 2006.
Prosecutors also said Nikolayev authorized an illegal transfer of four parcels of federal land with forest to private owners.
The verdict becomes effective in ten days and Nikolayev's defense has a right of appeal during this period.