Daniel Keneally was sentenced to a 15-month intensive correction order in Sydney's Downing Centre Local Court on Thursday after earlier being convicted of fabricating evidence.
The intensive correction order was imposed despite prosecutors urging magistrate Rodney Brender to instead order full-time imprisonment.
The 35-year-old was also ordered to complete 200 hours of community service and pay a $2000 fine.
Keneally wrote a statement containing numerous falsehoods relating to a phone call from Luke Brett Moore to Newtown police station in February 2021.
The statement, including claims Mr Moore wanted to kill a police officer, resulted in the activist being arrested and held in custody for three weeks.
The founder of ISuepolice was later released on bail and the charge dropped due to a recording of the conversation made on his phone.
Taken without Keneally's knowledge, the recording showed significant discrepancies from the officer's statement.
At a sentencing hearing in December, Keneally's lawyer Paul McGirr asked for an intensive sentence order to be imposed, allowing his client to remain out of jail.
Prosecutors said Keneally should be sent to prison to reflect the serious nature of the crime.
An investigation by the Law Enforcement Conduct Commission led to Keneally's charge in October 2022.
The police watchdog said it would provide a report to the NSW parliament when the criminal proceedings ended.
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