The ruling is part of the tax fraud case against the billionaire tycoon -- his first ever definitive criminal conviction -- in which he faces a year of community service or house arrest.
The 77-year-old Berlusconi was not present at today's hearing and his defence lawyers have the right to appeal the verdict, although it was not immediately clear whether they would.
"This is the latest piece in a mosaic that aims to eliminate the leader of 10 million Italians from the political scene and is destined to fail," said Renato Schifani, the chief senator from Berlusconi's People of Freedom party.
Banishment would be a humiliation for Berlusconi, who has been in parliament ever since the media and construction magnate first entered politics in 1994 and became a headline act.
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His ejection from parliament is in any case already under discussion because of a new law approved last year against parliamentarians with criminal sentences of more than two years.
That law would also ban Berlusconi from running for office for six years although a Senate vote is also required in that case and his lawyers have appealed to the European Court of Human Rights over the law, even though lawmakers from Berlusconi's own party had approved it.
Prosecutors at today's hearing had requested a two-year ban while Berlusconi's lawyers had asked for the minimum one year.
There is concern that the ruling could re-stoke political tensions in Italy's uneasy right-left coalition that had abated since Prime Minister Enrico Letta won a confidence vote in parliament against a challenge from Berlusconi on October 2.
"I think this country needs anything but political instability," Giorgio Squinzi, leader of the Confindustria employers' association, said at a conference after today's ruling.
Italy is struggling to shake off a two-year recession that has pushed unemployment to record-high levels, forced thousands of businesses to shut and led to steep budget cuts.