Lula, who ruled Brazil from 2003-2010, was convicted and handed a 9.5-year prison term on Wednesday for accepting a luxury seaside apartment and $1.1 million.

This is the latest twist in a giant corruption probe engulfing Latin America's largest economy.

But anti-corruption judge, Sergio Moro said the 71-year-old Lula would remain free pending an appeal -- something his lawyers immediately said they would lodge.

"We are appealing and will prove his innocence," the lawyers said in a statement sent to AFP.

The conviction nevertheless landed a heavy blow on the prospect of Lula making a political comeback in presidential elections due in October next year.

The verdict also sent a dramatic message to much of Brazil's political class that they, too, risked falling afoul of the anti-graft drive.

Even the current president, Michel Temer, has been charged with taking bribes and several of his ministers have resigned after corruption claims were made.