Schmidt, who stepped down in 2008, admitted to bribing Haider, the now-deceased governor of Carinthia, during negotiations to buy the bank.
Haider received around €2.5 million ($3.17 million) for football sponsorship in Carinthia and for a new football stadium in Klagenfurt.
Schmidt has also been ordered to pay a €300,000 fine.
Munich-based public-sector bank BayernLB bought Hypo in 2007. In 2009, Austria had to take over the loss-making lender to avoid a collapse that would have sent shock waves through eastern Europe, and BayernLB lost a total of €3.7 billion on its investment.
The court dismissed separate allegations of breach of trust against Schmidt.
Public prosecutors had argued that Schmidt and seven of his former board colleagues should be found guilty of embezzling money by overpaying heavily for Hypo.
Proceedings against most of the other defendants have been dismissed, though some of them had to pay several thousand euros to end the cases against them.
Earlier this month, BayernLB sued Austria for passing a law that forces some creditors to share the costs of winding down Hypo.