Kodnani, a three-time MLA from Naroda area who was considered to be close to Chief Minister Narendra Modi, is the first woman to be convicted in a post-Godhra riots case.
She and Babu Bajrangi were held guilty under sections 120 (B) (criminal conspiracy), 302 (murder) and 307 (attempt to murder) of IPC and the prosecution sought the maximum punishment of death sentence for all the convicts.
The 57-year-old MLA broke down in court as Additional Principal Judge Jyotsna Yagnik read out her verdict in which she also acquitted 29 other accused.
The court, which heard arguments on the quantum of sentence, will decide on the punishment on August 31.
Kodnani and the other accused, who have been on bail, were taken into custody and shifted to Sabarmati Jail.
The Congress latched on to the verdict to target Modi with party leader Digvijay Singh saying that it "has been proved now that BJP's minister and officials were involved in the Gujarat riots. Everything that happened was at the behest of Narendra Modi."
Law Minister Salman Khurshid said that the judgement enhances faith of the people in the legal system.
While the BJP downplayed the conviction of its MLA saying it was legal process and it doesn't do "politics on judicial verdicts", the Gujarat government was quick to distance itself from Kodnani saying she was not a Minister when the riots took place and dismissed demand for Modi's resignation.
"Congress demands CM's resignation in everything, or attempts to link him with anything. If this is the barometer, then those who have been convicted in the past and are ministers in the central government should also resign," Gujarat government spokesman Jaynarayan Vyas.
Kodnani was arrested in March 2009 when she was the minister following a probe by Supreme Court appointed Special Investigation Team and had to resign from the post.
She became an MLA for the first time in 1998 and won elections twice later from that constituency. She was made Minister of State for Women and Child Development in the Modi government in 2007, believed to be at the behest of L K Advani. She was the first Sindhi leader to become a minister in Gujarat since the state was founded in 1960.
"The maximum punishment for criminal conspiracy and murder can be death sentence," advocate Shamshad Pathan, representing the victims, said.
One of the accused, Suresh alias alias Richard Chara was also convicted for rape. The court also convicted several of the accused on charges of rioting, arson, unlawful assembly and causing hurt with weapons.
The massacre had taken place a day after the Godhra train burning incident of February 27, 2002.
On February 28, 2002 when a bandh call was given by the Vishwa Hindu Parishad (VHP), a large crowd gathered in the Naroda Patiya area and attacked people belonging to minority community that resulted in the death of 97 people while 33 others were injured in the violence.
During the arguments on the quantum of sentence in the special court today, Special Public Prosecutor Akhil Desai sought death sentence for all the convicts.
After hearing all the sides, judge Yagnik reserved the order on quantum of punishment for August 31, a lawyer said.
Desai argued that it is a fit case to be termed as "rarest of rare" and the court should award capital punishment to the convicts.
If the court takes another view, then it should at least award a minimum of 20 years of imprisonment to each of the convicts, he submitted.
Opposing his contention, defence advocate Niranjan Tikani appealed to the court to show leniency towards the convicts, keeping in mind their family background and financial condition.
Tikani also opposed the demand of capital punishment for Kodnani and submitted that her husband has been operated upon recently and is not keeping good health, while her son is studying in the US.
Tight security was in place today at the court premises and the Naroda Patiya area since morning. Apart from city police, CRPF and CISF were roped in police had cordoned off area in the one km radius around the court premises.
The trial in the case began in August 2009 and charges were framed against 62 accused. One of the accused, Vijay Shetty died during the course of trial. As many as 327 witnesses, including a journalists who conducted a TV sting operation on the accused, had been examined by the court.
Kodnani is the first among women accused of 2002 riot cases to be convicted. In Dipda Darwaja case of Mehsana district, three women were among the accused, but were acquitted on July 30, 2012.
In the Naroda Patiya case too, another two women were among the accused, but they got acquitted.
Also, among the 2002 riots cases probed by Special Investigation Team in which rulings have come, Naroda is the only case where convicts outnumber those acquitted (32-29).
In Godhra Train Carnage case, court convicted 31 and acquitted 63. In Sardarpura case, court convicted 31 and acquitted 42, and in Dipda Darwaja case 22 were convicted and 61 acquitted.
The Naroda Patiya case was probed by eight investigating officers over the last decade with the latest being Himanshu Shukla on behalf of SIT. It was one of the nine cases of Gujarat riots being probed by the SIT, including the Godhra train burning case.
Initially, 46 people were arrested by the Gujarat Police, whereas 24 more people were apprehended after the probe was handed over to SITin 2008. In all, 70 people were arrested in the case.
Six persons died before the charges could be framed, while two others identified as Mohan Nepali and Tejas Pathak jumped bail and are still absconding.