Qi had been accused of extorting money from local officials during his reporting, but denied the charges.
His lawyer, Li Chunfu, who visited his client in jail on Wednesday, said he planned to appeal the ruling.
"The court's decision was merely based on 29 people's accounts, but all of them failed to show up at the court, which is a violation of the law," he said.
"I believe they don't dare to show up because their accounts are full of faults."
A freelance journalist who worked with Qi on the reports, was also jailed two years on similar charges, added Li.
The New York-based Committee to Protect Journalist (CPJ) in a statement supporting Qi said at least 26 local journalists were in Chinese prisons because of their work.
'Brutal treatment'
"We condemn Qi Chonghuai's sentence and the brutal treatment he has received throughout his detention," said Bob Dietz, the CPJ's Asia programme coordinator.
Qi was arrested in June 2007 after he wrote about a Tengzhou official beating a woman for coming late to work.
Qi's article on the beating was posted on the website of Epoch Times, a US-based newspaper linked to the banned Chinese sect Falun Gong.
The Chinese Human Rights Defenders, an overseas-based group, in a statement on Wednesday quoted Qi as saying that he was beaten and threatened during his detention.
A report by the Paris-based rights group Reporters Without Borders early this year said China has the biggest number of jailed journalists, cyber dissidents, internet users and activists for freedom of expression.