The two men, Rune Lundberg, 61, and Håkan Nirstedt, 49, were found guilty by the Eskilstuna District Court of having offered 24 million kronor ($3.6 million) in kickbacks to the regime in order to secure contracts for the sale of wheel loaders and road graders.
The men were also handed suspended sentences and fined $18,000 and $9,000, respectively, according to the AP.
The indicted men worked for Volvo Construction Equipment International AB, which is suspected of having paid bribes worth 20 million kronor ($2.2 million) to win contracts for 145 wheel loaders and 43 road graders in the early 2000s.
In March 2008, Volvo was forced to pay US authorities $19.6 million in fines, as well as return past profits with interest from contracts related to the bribery scandal.
Sweden's chief prosecutor Nils-Eric Schultz, who is also pursuing a case against truckmaker Scania related to oil-for-food programme bribes, told the TT news agency he was satisfied with the ruling, but refrained from pushing for a corporate fine because Volvo had already paid the hefty fine to US authorities.
"That's something Scania hasn't done. So that's why I also have the possibility of pursuing an asset forfeiture motion and a motion for company fines against Scania," he said.
"Now I've got a little more inspiration to conclude that investigation as well."
Hans Strandberg, an attorney for one of the men criticized the ruling for ignoring the fact that the UN's sanction committee was aware that Iraqi authorities demanded kickbacks when it approved the Volvo deal.
"I'd like to appeal and have this reviewed by the court of appeal, but my client decides," he told TT.