Glitter, 61, whose real name is Paul Francis Gadd, was found guilty of committing obscene acts with two girls, ages 10 and 11, at his rented seaside villa in southern Vung Tau last year.
The former rock star showed no emotion while the verdict was read but threw the court into disarray by proclaiming his innocence afterward.
"I haven't done anything. I'm innocent. It's a conspiracy by you know who," Glitter shouted, apparently referring to British tabloid newspapers that had tracked down his presence in Vietnam.
Reporters and onlookers, allowed into the courthouse in southern Ba Ria-Vung Tau province to hear the verdict following the closed two-day trial, pressed toward Glitter in a scene of pandemonium as police fended them off and escorted him out of the building.
The judge said Glitter would be deported to Britain after serving his sentence. He was also required to pay compensation of $320 to each girl's family and court fees.
The court, in its verdict, cited graphic testimony from the girls that Glitter had fondled and molested them multiple times in his rented home and in nearby hotels.
"Caring for children is to care for our future ... but Gary Glitter's acts went against this," said Judge Hoang Thanh Tung. "He sexually abused and committed obscene acts with children many times in a disgusting and sick manner."
Glitter, who had faced up to seven years in prison, was given the minimum sentence of three by the court. The judge later explained that among the factors contributing to the lighter sentence was the $2,000 each that Glitter paid to each girl's family as "compensation" in December.
He has 15 days to appeal his sentence. His attorney, Le Thanh Kinh, said Glitter would be eligible for parole in a year, after he serves one-third of his time.
Glitter, a 1970s pop icon in Britain famed for his sequined jumpsuits, platform heels and bouffant wigs, sported a more conservative look for his trial: black clothes and a red bandanna on his head that he removed inside the court.
Glitter, who looked visibly thinner since his arrest, has been held at Phuoc Co prison outside Vung Tau since November 19, when he was caught at the Ho Chi Minh City airport trying to board a flight for Bangkok. Police confiscated his laptop, which had hundreds of pornographic pictures on it.
The former rock star, who hit his musical peak in the 1970s, had hits with "Leader of the Gang" and "Do You Wanna Touch" but is perhaps best known for his crowd-pleasing rock anthem "Rock and Roll (Parts 1&2)," which is still played at sporting events.
Glitter was convicted in Britain in 1999 for possessing child pornography and served half of a four-month jail term. He later went to Cambodia and in 2002 was expelled from that country, but Cambodian officials did not specify any crime or file charges.