Pugh, 69, will also have to serve three years of supervised release once she's out of prison, according to the sentence handed down by U.S. District Judge Deborah K. Chasanow.
The disgraced former mayor was also ordered to pay $411,948 in restitution and to forfeit $669,688, including property in Baltimore and $17,800 from her Committee to Re-elect Catherine Pugh.
Federal prosecutors had asked for Pugh to get nearly five years in prison, while defense lawyers suggested a year and a day.
Outside court, U.S. Attorney Robert Hur lashed out at defense lawyers, saying they wrongly characterized Pugh's crimes as being victimless.
"The victims in a case like this ... are all of us, the people and the city of Baltimore, the taxpayers who expect, and they should expect, and they should demand, integrity," said Hur, the region's lead federal prosecutor.
Even though Chasanow sentenced Pugh to less than the 57 months sought by prosecutors, Hur said three years was within sentencing guidelines and "should serve as a strong message and, I hope, a deterrent to anyone in public life who is thinking about using their public office for personal gain."
"This was not a light sentence in my view," Hur said.
Pugh resigned in early May after federal authorities, who had started investigating her two years earlier, said she arranged for bulk sales of her "Healthy Holly" children's books to disguise hundreds of thousands of dollars in kickbacks.
The money was alleged to have been directed to her campaign coffers and used to pay for and renovate a new house.
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Pugh told reporters outside court that it was never her intention to scam taxpayers.
"Sometimes when you think you're doing one thing, as my mother used to say, it's not what you intend to do, it is what you do," Pugh said. "And all of us pay the price for the things that don't turn out the way that they should turn out."
Pugh also apologized in a 13-minute video submitted to the court, saying she regretted the actions that led to her pleading guilty to federal charges of conspiracy to commit wire fraud, wire fraud and tax evasion.
"I just want to apologize to the citizens, to young people, to partners, my friends — everyone I've offended, everyone I've hurt and the city's image — by pleading guilty and being a part of all of this that had led me here today," Pugh said.
"It's created such a ringing negativity on our city. And I know better who I am. But also, I know here I am right now. And I accept responsibility. I accept total responsibility. I've pleaded guilty, and I'm sorry."
Before she was elected mayor in 2016, Pugh had served in the Maryland Senate and the state's House of Delegates, as well as on the Baltimore City Council.
Pugh was allowed to leave court Thursday, and the Bureau of Prisons will ask her to turn herself in at some point by mid-April, prosecutors said.
"I don't think this is the last chapter for Catherine Pugh. And I look forward to regaining my strength, my zeal, my love for the people of this city," she told reporters. "It's not the last you'll see of Catherine Pugh, but thank you all and thanks to my team and my friends."