Stephan Schmidheiny, the former owner of a company making Eternit fibre cement, and Jean-Louis Marie Ghislain de Cartier de Marchienne, a major shareholder, were sentenced in absentia after being found guilty of causing an environmental disaster and failing to comply with safety regulations.
They were also ordered to pay damages to civil parties in a payout expected to add up to tens of millions of euros.
Hundreds of relatives of victims had waited anxiously for the verdict in a trial which was closely watched as a potential precedent around the world, and they wept, cheered and clapped when the sentence was read aloud.
"It's a fair verdict which acknowledges their responsibility... the problem now is to see if the condemned men will face up to their obligations, because we're not sure," lawyer Sergio Bonetto told AFP.
Schmidheiny is now 64 years old and De Cartier 90. Their crimes usually carry a maximum 12-year sentence, but prosecutors had sought a harsher punishment because they say the fall-out continues to affect victims.
Defence lawyers denied the accused had direct responsibility for the Italian company, and the pair have been absent from court throughout.
"This trial will go down in history... but it will not bring my dad back," said Piero Ferraris, whose father Evasio died in 1988 of lung cancer after working in a local Eternit factory from 1946 to 1979.
The verdict was watched by around 1,500 relatives, victims and supporters who huddled around three large screens streaming the hearing live.
Ahead of the verdict, relatives of people killed by asbestos-related diseases held up banners with sketches of the Swiss billionaire behind bars.
Eternit went bankrupt six years before asbestos was banned in Italy in 1992.
"I have never seen such a tragedy. It affects workers and inhabitants... it continues to cause deaths and will continue to do so for who knows how long," prosecutor Raffaele Guariniello said in his closing speech in November.
The trial, which began in 2009 after a five-year investigation, is the biggest of its kind against a multinational for asbestos-related deaths.
Asbestos, which was banned in Europe in 2005, but is still widely used in the developing world, had been used mainly as building insulation for its sound absorption and resistance to fire, heat and electrical damage.
The inhalation of asbestos fibres can cause lung inflammation and cancer, and symptoms can take up to 20 years to manifest after exposure.
"It is a historic verdict... But the battle against asbestos does not end here, even with an exemplary sentence," Italy's Health Minister Renato Balduzzi said in a statement.
"It is not a local battle, but a national one, a worldwide one. The Turin verdict shows that Italy is doing its part," he said.
In France, the first complaints by workers exposed to asbestos date back to 1996 but there have been no major trials even though health authorities blame asbestos for between 10 and 20 percent of lung cancers.
The French victim support group Andeva said the trial represents "an amazing hope for victims across the world."
"We are waiting for the verdict with great impatience," French lawyer Jean-Paul Teissonniere, told AFP ahead of the hearing.
"We will ask French judicial authorities why a trial like this is possible in Italy and not in France," he said.
In Switzerland, three suits filed against Eternit's former owners -- Thomas and Stephan Schmidheiny -- expired under a statute of limitations in 2008.
In Belgium, a civil case in November awarded compensation of €250,000 ($330,000) to a family of asbestos victims.
The court in Brussels found Eternit responsible for the death in 2000 of the wife of a factory engineer who died 13 years before because of asbestos and of two of their five sons who died for the same reason.