The "Special One" is accused of committing tax fraud in 2011 and 2012 when he coached Spanish giants Real Madrid. He failed to report some 3.3 million euros in revenues from his image rights to the Spanish tax authorities.
According to the details of the agreement, Mourinho's jail term will be commuted to a fine of 182,000 euros in addition to the nearly 2 million he will have to pay back.
The 56-year-old repaid a first sum of 462,000 euros in July.
Mourinho, who was sacked by Manchester United in December following a string of disappointing performances, is the latest high-profile football figure to be judged by the Spanish tax authorities.
Former Man Utd and Real Madrid star Cristiano Ronaldo was sentenced two weeks ago to a two-year prison sentence, also commuted, and a fine of 3.2 million euros.