She was convicted Thursday of 43 counts of fraud and 25 of theft of money from a women's political league. The judge handed down a five-year sentence Friday but suspended one year of that term.
Magistrate Peet Johnson said she could be released on parole after eight months and required to perform community service for the remainder of her term.
Her broker and co-defendant Addy Moolman was found guilty of 58 counts of fraud and 25 of theft and was sentenced Friday to seven years in prison. Two of those years were suspended.
Both were released on bail pending a possible appeal.
Outside the courtroom, Madikizela-Mandela declined to discuss the case. However, she said she had resigned her seat in Parliament, her membership in the executive committee of the governing African National Congress, and the head of the ANC Women's League.
"I will remain a dedicated, committed and loyal member of the ANC," she said.
"I intend to spend my time henceforth to do the work that I started in my early life and to bind my destiny with everyone with whom I share the ideals of a just South Africa."
Madikizela-Mandela had pleaded innocent to 60 charges of fraud and 25 of theft involving $120,000 at the African National Congress Women's League, which Madikizela-Mandela leads.
The prosecution said letters on organization stationery that bore Madikizela-Mandela's signature were used to fraudulently obtain bank loans in the name of bogus employees, including her daughter, Zinzi.
The theft charges relate to money deducted from the bank accounts of loan applicants for a funeral policy that the prosecution says did not exist.
Madikizela-Mandela is still known to her supporters as "the mother of the nation," even though she also was convicted in 1991 of kidnapping and assault, and sentenced to six years in prison. Her appeal saw the sentence reduced to a fine.
Nevertheless, she has been sharply criticized by the African National Congress party, which leads the country.
Madikizela-Mandela also faces a public reprimand in Parliament for failure to disclose some of her income. In Cape Town on Friday, the High Court dismissed with costs her bid to stop the reprimand.
Winnie Mandela and Nelson Mandela separated in 1992 and were formally divorced in 1996.