"He shall be hanged by neck until he is dead," ruled a three-member panel of judges of International Crimes Tribunal-2 headed by Justice M Enayetur Rahim.
The tribunal said it found the former militia commander guilty in two of the five charges brought against him.
64-year-old Hossain, clad in a white dress, was handed death for the killing of 33 civilians at his home district in central Brahmanbaria district on August 22, 1971.
He was the commander of the local unit of Razakar, a dreaded militia force comprising Bengali-speaking collaborators which Pakistanis formed as their auxiliary troops in 1971.
Also Read
Hossain was associated with fundamentalist Jamaat-e- Islami, which was opposed to Bangladesh's independence.
After the defeat of Pakistan, he managed to join Awami League, which led the liberation war.
So far, Hossain is the only Awami League leader to face trial for war crimes.
Ahead of his expulsion, Hossain served as the Awami League organising secretary of a union parishad, the lowest administrative tier at grassroots, for 16 years until 2012.
The death penalty to the militia commander was celebrated at Shahbagh by supporters of the pro-democracy Ganajagaran Mancha.
Today's verdict came two weeks after the same tribunal sentenced to death a fugitive leader of Bangladesh Nationalist Party, Zahid Hossain Khokon, for 1971 crimes against humanity.
Khokon too was a local Jamaat leader in 1971 and later joined BNP and subsequently became the mayor of his hometown of southwestern Nagarkanda.
Only one of them, Jamaat's joint secretary general Abdul Quader Mollah so far was executed while two of the convicts were now living in the US and Britain and the other cases were pending before the Supreme Court for review.