Talaal Adree, 30, from Auburn in Sydney's west, was among 37 Islamists on trial as members of the "Peninsula Lions" group believed to be linked to Osama bin Laden's al Qaeda in Iraq and Saudi Arabia.
Six of the suspected militants were sentenced to death.
Among those on trial were 25 Kuwaitis, seven stateless Arabs, two Jordanians, a Saudi, and a Somali.
A Reuters reporter who was at the court said none of the defendants were present when the verdict was announced.
Other suspects received jail terms of between four months to 15 years, and one received a life term.
Adree, an Australian citizen who had returned to Kuwait three years ago, faced charges of joining a terrorist organisation and handling weapons and explosives.
The Australian Department of Foreign Affairs and Trade said it understood Adree would appeal the judgment.
"We can confirm that ... (Adree) was found guilty of terrorism-related offences," a department spokeswoman said.
"He was sentenced to four years in prison with hard labour. We understand he intends appealing the judgment."
The Australian government was providing consular assistance to Adree's family, she said.
Adree's mother told ABC television in May her son had said he been tortured by two men while in custody whom he said had Australian accents.
The seven who were acquitted included Islamist cleric Sheikh Hamed al-Ali, lawyer Osama al-Munawer who represents Islamists as well as the wife of Amer al-Enezi - one of al-Qaeda's top leaders in Kuwait who died in custody in February.
Two senior militants who are on the run, Khaled al-Dossari and Mohsen al-Fadli, each received a 10-year jail term in absentia. Defendants can appeal the verdict.
The suspects were charged with belonging to an "extremist" group, calling for attacks on state facilities, and trying to kill Kuwaiti security forces as well as members of "friendly forces" in the country.
Used as the main launch pad for the 2003 war in Iraq, Kuwait hosts up to 30,000 US troops and some 13,000 US citizens live in Kuwait.
Prosecutors had demanded the death penalty for about 20 suspects for four shootouts in January in which nine Islamists and four security personnel were killed.
Police have said some of the suspects had confessed to planning suicide attacks against US military and Western targets in Kuwait, but several militants have denied the charges saying confessions were extracted under duress.
Kuwait has cracked down on Islamists opposing the US military presence there. Diplomats say radical Islam is taking hold among Kuwaiti youth.
Neighbouring Saudi Arabia has faced an al-Qaeda campaign to topple the US-backed monarchy since 2003.