The Suwon High Court ordered him to pay a fine of 3 million won ($2,506) for spreading false information ahead of elections, overturning an earlier court decision that found him innocent.
In May, the Seongnam branch of the Suwon District Court ruled that Lee was not guilty of four criminal charges, including forcibly admitting his elder brother to a mental hospital in 2014 and spreading false information.
If the Supreme Court confirms the sentence, Lee would have to step down. By law, elected public officials lose their posts if they receive a sentence heavier than imprisonment or are fined more than 1 million won for violating the election law and political funding act.
Lee's trial has drawn strong media attention as he governs South Korea's most populous province, which surrounds Seoul. Also, Lee is mentioned as one of the ruling Democratic Party's presidential hopefuls.
A recent survey showed that Lee was the third-favorite presidential hopeful at 8 percent, following incumbent Prime Minister Lee Nak-yon with 21 percent and main opposition Liberty Korea Party Chairman Hwang Kyo-ahn with 14 percent.
The poll of 1,200 adults was conducted by Gallup Korea from Tuesday to Thursday. It has a margin of error of plus or minus 3.1 percentage points with a confidence level of 95 percent.
Lee unsuccessfully ran against President Moon Jae-in in the Democratic Party's race to pick its presidential candidate in 2017. (Yonhap)