Mourinho, sacked by Manchester United in December following a string of disappointing performances, is the latest high-profile soccer figure to be judged over his tax affairs in Spain.
The Portuguese national was accused of owing Spanish tax authorities almost €3.3m (£2.9m).
The Portuguese will have to pay around £1.75m (€2m) in fines. The one-year-prison sentence has been substituted for a fine of €172,800.More news: West Ham v Liverpool: Title-chasers slow up at worst possible moment
Mourinho's plea deal comes two weeks after former Real Madrid player Cristiano Ronaldo pleaded guilty to tax fraud from the time he played in Spain.
He seemingly accepted a six-month term for each of the two tax-related crimes he was accused of, totaling a one-year suspended sentence.
However, tax authorities later found that some of the information presented in that settlement was incorrect, the prosecutors said.
In 2016, Mourinho's representatives Gestifute released a statement insisting he was "fully compliant with tax obligations" after allegations of tax evasion first came to light via the whistleblowing platform "Football Leaks".
Prosecutors believe by ceding his image rights to a series of companies based in tax havens.