Khaleda's son, Tarique Rahman, and four others - a lawmaker, Zia's secretary, her nephew and a businessman - were jailed for 10 years each at the end of a case that lasted almost 10 years.
Zia's son Tarique Rahman, a co-defendant in the case, and four of her aides were sentenced to 10 years in jail. "No way we will accept this verdict", BNP secretary general Fakhrul Islam Alamgir told AFP after the hearing.
The question is whether Zia's five-year incarceration disallows her from contesting the generalelections that will take place in December.
Around 3,500 opposition activists and officials were arrested in a sweep by security forces ahead of the verdict according to BNP spokesman Rizvi Ahmed.
Speaking on condition of anonymity, political observers in Dhaka said if Zia is not allowed to contest, it would be hard for the BNP to convert the popular support into a win.
Zia entered politics in the 1980s after her husband Ziaur Rahman was killed in an abortive coup.
"Law and order across the country is normal, and there is no panic among the people centering the judgment", he said, adding, "I didn't get any report of untoward incident in the country".More news: Backed forces in Syria strike pro-regime militants, killing at least 100
Zia, however, had dismissed the charge by calling it politically motivated.
However, the ruling Awami League leaders said the verdict represented a milestone in establishing rule of law in the country.
There was tight security in Dhaka streets as the ex-Prime Minister was on her way to a court with a convoy of armed police and Ms Zia's private security personnel's vehicles slowly escorting her to the court in downtown Dhaka from her Gulshan residence.
Human Rights Watch on Thursday urged the government to stop what it called "arbitrary arrests and detentions".
The jail sentence may mean the 72-year-old is barred from parliamentary polls due later this year.
Zia served as prime minister from 1991 to 1996 and then from 2001 to 2006.
"Law is equal to all", said Iqbal Mahmood, chairman of Anti-Corruption Commission which filed the case, while giving his reaction to the verdict at his Segunbagicha office.
The possibility of the absence of Khaleda from the political amphitheatre may be significant for the BNP as political parties in Bangladesh - except the Jamaat-e-Islami, which is a religion-based political outfit - can not survive without faces. It was seen by many as a blunder on her part as she remained on the fringe of national politics.