Allbäck was hit with a 32,000 kronor ($5,000) fine plus 160 hours community service but will not go to jail after being handed a suspended sentence.
His companies will have to shell out 100,000 kronor in corporate fines but the court did however acquit him of fraud charges.
Allbäck was not in court when the conviction was handed down and is presently overseas.
“I am surprised by the verdict,” said Allbäck’s lawyer Christian Olsén to SVT.
His lawyer said he will speak to his client and decide whether or not to appeal.
Allbäck, a former professional footballer and father of ex-Swedish international Marcus Allbäck, stood accused of swindling millions out of Gothenburg’s municipal housing authority. It was alleged that several of the invoices submitted for public projects and approved by the municipal officials concerned contained gross irregularities.
He is one of the key figures in a Gothenburg bribery scandal first uncovered in April 2010 by Sveriges Television (SVT) investigative news programme Uppdrag granskning and newspaper Göteborgs-Tidningen (GT).
The Gothenburg corruption scandal involved the municipal housing firm Familjebostäder and the city’s sports and clubs division, as well as the relationship between Allbäck and municipal officials.
Following the revelations, Sweden’s anti-corruption prosecution unit opened an investigation into allegations of aggravated bribery against several officials in Gothenburg and in 2011 former housing chief, Olle Lundgren, was sentenced to six months in prison for his role in the scandal.