A Paris court on Tuesday fined Béziers mayor Robert Ménard 2,000 euros and awarded damages with interest of between one and 1,000 euros to six anti-racist groups who had brought the case.
The fine was higher than the 1,800 euros called for by the public prosecutor, who said the controversial mayor had "pointed the finger at kids, whom he describes as a weight on the national community".
"He reduces them to their religion, regardless of whether they have French nationality or if they practice the religion," he argued.
Incitement to hatred can mean a fine of up to 45,000 euros and one year in prison according to French law.
Ménard's defence appealed to the court not to pass a "death sentence on freedom of thought".
Tweets and statistics
In September 2016, referring to a far-right meme that white French people are being squeezed out by Muslim immigrants, Ménard tweeted "Striking proof of the #GreatReplacement in course. Enough to look at old class photos."
In a later television interview he claimed that 91 percent of pupils in one class in his town were Muslim, adding "Obviously that's a problem."
In 2005 Ménard created another stir when he claimed that 64.6 percent of pupils in Béziers were Muslim, despite the fact that the French state does not collect statistics on religion or ethnic origin.
During the court case the mayor, who also hit national headlines last year with a poster featuring refugees and the slogan "They're coming - Migrants in our town centre!", claimed that he was "describing reality" in order to "find solutions for difficult questions".