Judge Colonel Maya Heller, one of the trial's three military judges, spent more than two and a half hours reading her decision on Wednesday.
She criticised the arguments of Azaria's lawyers, who argued that the soldier feared Sharif was wearing explosives.
The judge said that Sharif posed no threat because he was lying incapacitated on the ground when Azaria shot him.
The incident was filmed and quickly went viral online.
Shooting video polarises opinion
On 24 March Sharif and Palestinian Ramzi al-Qasrawi attacked Israeli troops with knives in the West Bank city of Hebron.
One soldier was wounded. In response, the troops opened fire on the two men, killing Qaswari and wounding Sharif.
The video shows Sharif lying on the ground, still alive after being shot.
Moments later, Azaria shoots Sharif in the head.
Colin Shindler, emeritus professor at London's School of Oriental and African Studies, explains the importance of the video.
"When such a controversial video goes viral, it is going to create a polarisation," he told RFI. "And, when that polarisation feeds into the political polarisation in Israel, you have a situation where very strongly held views are being propagated. And this is what has happened."
Azaria being found guilty of manslaughter took some by surprise, as he was convicted by a military court, not a civil court.
According to Israeli media, the last time an Israeli soldier was convicted of manslaughter was in 2005.
"There are not many cases of unlawful killings that are brought before military courts," says Mordechai Kremnitzer, law professor at the Hebrew University of Jerusalem.
"This is not the bread and butter of military courts, dealing with unlawful killings of terrorists."
However, Kremnitzer says that soldiers who do end up going to trial are often convicted.
"In the majority of cases where soldiers are brought before military court, they are also convicted." The reason for this, he explains, is that "the prosecution examines the case before it brings charges before the court, so in most of these cases, the result is a conviction."
What is unusual in this case, then, is not that an Israeli soldier was convicted but that the case went to trial in the first place, as soldiers put on trial for extrajudicial killings is somewhat rare.
Israelis divided, Palestinians less so
Azaria's trial has divided Israeli society between those who believe he was justified in shooting Sharif and those who believe he violated the military's code of conduct.
Israeli right-wing politicians, including Prime Minister Benjamin Netanyahu, have defended the soldier's actions.
On the other hand, Israeli rights group B'Tselem accused security forces of "routine whitewashing of cases in which security forces kill or injure Palestinians with no accountability", in a statement issued after the verdict.
But Palestinians' feelings are less mitigated on the issue.
"It hasn't been divisive in Palestine at all. It's important not to fall into that trap," says Ali Abunimah, cofounder of the online publication Electronic Intifada.
"It's divisive in Israel because there is a widespread view that Israeli soldiers should be able to kill Palestinians with complete impunity."
But according to Abunimah, this trial "isn't very significant" for Palestinians.
"Thousands of Palestinians have been killed in the past 15 years by the Israeli army and there has been no accountability," he comments. "I think, if you ask practically any Palestinian, they will tell you that even though there was a guilty verdict in this case, in all likelihood he will receive a very light sentence."
Azaria’s sentence has yet to be announced. The maximum sentence for manslaughter is 20 years in prison.