Heinrich Boere had told the court in Aachen that he killed a bicycle shop owner, a pharmacist and a member of the resistance as part of a death squad.
But he said he was following orders and would have been shot for not doing so.
Prosecutors said Boere was a willing member of the SS, which he joined after the Netherlands was invaded in 1940.
But correspondents say that there remains some doubt over whether Boere, who uses a wheelchair and lives in a nursing home, will actually go to jail.
A 90-year-old former German infantry commander, Josef Scheungraber, was given a life sentence by a German court in August, but remains free while his appeal is heard.
Boere's lawyer, Gordon Christiansen, has said he will appeal.
'Totally random'
In December, Boere testified that he had shot Fritz Bicknese, a chemist and father of 12; bicycle seller Teun de Groot, who helped Jews go into hiding; and Dutch resistance member Frans Kusters.
He told the state court that he and fellow members of the SS Silbertanne (Silver Pine) death squad had been informed by their superiors that the men were to be killed in retaliation for attacks by the resistance.
"I knew that if I didn't carry out my orders I would be breaking my oath and would be shot myself," he said.
"At no time in 1944 did I act with the feeling that I was committing a crime," he added. "Today, after 65 years, I naturally see things from a different perspective."
But the presiding judge, Gerd Nohl, told the court that all three killings had been carried out "on a totally random basis" and constituted murder.
"These were murders that could hardly be outdone in terms of baseness and cowardice - beyond the respectability of any soldier."
Members of the death squad had worn "civilian clothes, rain coats, and carried out the crimes either early in the morning or late in the evening", and the risk to Boere when he shot the three men had been "zero", he added.
The pensioner looked on impassively as the sentence was handed down.
The top Nazi hunter at the Jerusalem-based Simon Wiesenthal Centre, Efraim Zuroff, welcomed the conviction, saying it was "again another proof that even at this point it is possible to bring Nazi war criminals to justice".
"It also underscores the significance of the renewed activity on the part of the German prosecution," he told the Associated Press.
Extradition
Boere, who was born near Aachen to a Dutch father and German mother, moved to the Netherlands when he was an infant.
He was 18 when he joined the Waffen SS, shortly after the Germans overran his hometown of Maastricht in 1940. After fighting on the Russian front, he ended up back in the Netherlands as part of the Silbertanne squad.
He admitted the killings to the Dutch authorities when he was in captivity after World War II, but managed to escape from his POW camp and returned to Germany, where he has since lived.
In 1949, a tribunal in Amsterdam sentenced him to death in his absence - later commuted to life in prison.
A Dutch extradition request was turned down by the West German government in the early 1980s, after a court ruled that there was a possibility Boere had German citizenship.
Following a request that Boere serve his sentence in Germany, a German appeals court ruled three years ago that the 1949 trial was unfair because he had not been present.
He was eventually indicted in April 2008, but a court then said he was unfit to stand trial, largely because of heart problems. The decision was eventually overruled on appeal last July.
BBC
