Nazanin Zaghari-Ratcliffe has been sentenced to another year in prison on charges of "propaganda activities against the regime" in Iran.
The UK-Iranian national is also banned from leaving the country for one year for participating in a protest in front of the Iranian Embassy in London in 2009, her lawyer Hojjat Kermani told Emtedad news website.
"Nazanin Zaghari was sentenced to one year in prison and one year ban from leaving the country on charges of propaganda against the Islamic Republic," Mr Kermani said following the ruling.
Prime Minister Boris Johnson told reporters he thought the sentencing was "wrong".
He said: "We will have to study the detail of what the Iranian authorities are saying.
"I don’t think it’s right at all that Nazanin should be sentenced to any more time in jail. I think that it was wrong.
"I think it’s wrong that she’s there in the first place and we’ll be working very hard to secure her release from Iran."
He added that the "government will not stop" and will "redouble our efforts" to fight for Mrs Zaghari-Ratcliffe’s release, and will work alongside "our American friends on this issue as well".
Foreign Secretary Dominic Raab called the further detention of Mrs Zaghari-Ratcliffe a "totally inhumane and wholly unjustified decision".
He added: "We continue to call on Iran to release Nazanin immediately so she can return to her family in the UK. We continue to do all we can to support her."
In March, the aid worker was released from house arrest and had her ankle tag removed after her five-year prison term expired.
But she was unable to return to the UK to be reunited with her husband and young daughter and was told to return to court on a new charge of "propaganda against Iran".
The 42-year-old was arrested at a Tehran airport while taking her infant daughter to see her parents in April 2016 and was later jailed over disputed allegations she was plotting to overthrow Iran’s government.
Her family and her employer, the Thomson Reuters Foundation, a charity, deny the allegation.
A human rights group supporting Mrs Zaghari-Ratcliffe said she has never received a fair trial in Iran and that her detention has "always been illegal under international law".
Redress director Rupert Skilbeck added: "Nazanin has already suffered severe physical and psychological impacts from the torture and ill-treatment she has been subjected to during the past five years.
"A further sentence to prison or house arrest may cause irreparable damage to her health.
"The case must be dismissed and she should be allowed to return to her husband and daughter in the UK immediately."
Richard Ratcliffe, her husband, had described the latest court hearing as coming at the end of a "long ordeal" and said he would be "very surprised" if his wife was acquitted.
Speaking after the verdict, he said Nazanin was "actually quite calm" unlike previous court decisions when she had been "really down".
"I think in reality her lawyer’s going to put in an appeal – and we’ll see what happens with that appeal," said Mr Ratcliffe, who said the process could take a few months.
State media in Iran have not immediately acknowledged the sentence.
It comes as Iran and Britain negotiate over a long legal dispute over an arms sale from the time of the Shah.
Iran may be extending Nazanin’s agony to increase leverage on the UK
Analysis by Dominic Waghorn, diplomatic editor
Nazanin Zaghari Ratcliffe should be home by now. She should never have imprisoned in the first place, but her five-year sentence came to an end last month.
Instead of letting her fly home to be with her young daughter and husband, the Iranians have trumped up new charges.
This time she’s accused of spreading propaganda for taking part in a protest outside the Iranian embassy in 2009, her lawyer has told the Associated Press.
It is devastating news for Richard Ratcliffe her husband who has fought a heroic battle to bring his wife home. He was bracing himself for another sentence and travel ban but would have hoped the sentence would be suspended.
That may have been a sign the Iranians were playing for time. They are effectively holding his wife as a hostage to secure the repayment of a longstanding debt Britain owes Iran.
The fact that it appears to be a custodial sentence, at this stage at least, raises the deeply sinister prospect for Nazanin of going back to jail, where she was tortured and suffered untold psychological distress for four years before being allowed back to her parents’ house a year ago under house arrest.
It also raises the prospect that the Iranians have longer-term plans for Nazanin who they are cynically holding as a pawn in a bigger game with the UK and possibly the US.
Iran wants £400m plus interest. It paid the money in the 70s expecting Chieftain tanks in return but Britain never delivered after a revolution in Iran ushered in a revolutionary theocratic regime.
The debt has been a long-festering sore in British-Iranian relations ever since. There has been progress towards paying the money back but it remains unpaid as yet.
Iran may be extending Nazanin’s agony to increase leverage on the UK in the negotiations to get the money back. Or it may have other plans for her. Either way, the anguish goes on.
Grown men in Tehran continue to hold a mother hostage and apart from her young daughter and husband, pawns in a game that has nothing to do with them.