He was found guilty over his role in the killing of 148 people in the mainly Shia town of Dujail in 1982.
His half brother Barzan al-Tikriti was also sentenced to death, as was Iraq's former chief judge Awad Hamed al-Bander
Former vice-president Taha Yassin Ramadan got life in jail and three others received 15 year prison terms.
Another co-defendant, Baath party official Mohammed Azawi Ali, was acquitted.
When called to court, Saddam Hussein, dressed in his usual dark suit and white shirt and carrying a Koran, walked to his customary seat and sat down.
Judge Rauf Abdel Rahman ordered Saddam Hussein to stand while he read out the verdict, but the former president defiantly refused to do so and had to be moved from his seat by court attendants.
As the judge began reading the death sentence Saddam Hussein shouted out "Allahu Akbar!" (God is Greatest) and "Long live Iraq! Long live the Iraqi people! Down with the traitors!"
The former leader looked shocked and furious as the sentence was passed, and continued to shout, denouncing the court, the judge and the US-led occupation force in Iraq.
But the BBC's world affairs editor John Simpson said that after his tirade, as he was led away from the courtroom, Saddam Hussein seemed to have a small smile on his face.
"It was as if he was thinking 'I've come here and done what I intended to do'," our correspondent said.
Celebratory gunfire
Shortly after the verdict was announced celebratory gunfire could be heard across Baghdad.
The whole city of six million people has been placed under a 12-hour daytime curfew that bans all vehicle and pedestrian traffic amid fears of violence from Saddam Hussein's Sunni Arab supporters.
THE SENTENCES
* Saddam Hussein, former Iraqi president: death by hanging
* Awad Hamed al-Bander, Chief Judge of Revolutionary Court: death by hanging
* Barzan Ibrahim al-Tikriti, Saddam Hussein's half-brother: death by hanging
* Taha Yasin Ramadan, Iraqi vice-president: life sentence
* Abdullah Kadhem Ruaid Senior Baath official: 15 years
* Abdullah Rawed Mizher, Senior Baath official: 15 years
* Ali Daeem Ali, Senior Baath official: 15 years
The government cancelled all army leave and the city's civilian airport has been closed.
Three nearby provinces, including Salahuddin, which contains Saddam Hussein's hometown of Tikrit, are also under curfew.
Almost three years since Saddam Hussein was captured, soaring sectarian violence has brought Iraq to the brink of civil war.
Few Iraqis think the trial verdict will ease conflict, the BBC's Andrew North in Baghdad says.
Even those Iraqis who want to see their former leader dead do not believe his execution would make things any better, our correspondent says.
'Victors' justice'
Many critics have dismissed the trial as a form of victors' justice, given the close attention the US has paid to it.
Lawyers for Saddam Hussein have also accused the government of interfering in the proceedings - a complaint backed by US group Human Rights Watch.
And the former leader's lawyers have attacked the timing of the planned verdict, which comes days before the US votes in mid-term elections.
US President George W Bush's Republican Party is at risk of losing control of Congress in part because of voter dissatisfaction over its handling of the Iraq conflict. In a televised speech on Saturday, Nouri Maliki, Iraq's Shia Arab prime minister, said he hoped Saddam Hussein would get "what he deserves" for "crimes against the Iraqi people".
Ahead of the verdict Mr Maliki called for calm, saying that Iraqis should mark it in a way that "does not risk their lives".
Source -
http://news.bbc.co.uk/1/hi/world/middle_east/6117910.stm