Sentencing the extremists to between five and 12 years, Judge Ottmar Breidling said that they planned to stage a "monstrous bloodbath."
The four included two German converts to Islam, Fritz Gelowicz and Daniel Schneider, who each received 12 year jail terms. Adem Yilmaz, a Turkish citizen got 11 years while Atilla Selek, a German of Turkish origin was given five years.
The self-confessed extremists were convicted in a high-security courtroom in the western city of Düsseldorf after a more than 10-month trial. Judge Breidling said they had aspired to mounting a "second September 11, 2001."
"If the accused had managed to do what they planned, it would have led to a monstrous bloodbath, primarily among US army personnel and also civilians," he said.
The judge added that there were now "many impressionable young men and men who have already been led astray, ready to kill for notions of Jihad.
"Violent Islamism has penetrated our society and turned young men against it," he said.
The four members of the Sauerland cell, named after the region where three were captured in September 2007, admitted to belonging to a "terrorist organisation," plotting murder and conspiring for an explosives attack.
Authorities said they captured the men just in time, as they were planning attacks before October 12, 2007, when parliament was to vote to extend German participation in the NATO force in Afghanistan.
Prosecutors had sought jail terms of between five and a half years and 13 years - less than the maximum 15 years - due to the defendants' cooperation. Defence attorneys called for much lighter judgements.
After the biggest criminal surveillance operation in postwar history, police using US and German intelligence caught three of the suspects red-handed, mixing chemicals to make some 410 kilogrammes (900 pounds) of explosives. This was 100 times the amount used in the 2005 London bombings that killed more than 50 people, prosecutors said.
The fourth suspect was arrested soon after in Turkey.
The cases of Gelowicz, 30, and Schneider, 24, in particular shocked the country, raising questions how seemingly "normal" Germans could become radicalised by Islamic militant preaching and attend terror training camps.
The group said it was acting on behalf of the Islamic Jihad Union, an Islamic militant group with ties to al-Qaida that is believed to have set up training camps in the Afghan-Pakistani border region.
Federal prosecutors said that they gleaned crucial insights into extremist recruitment and training with the defendants' confessions.
Gelowicz, Schneider and Selek, 25, had each renounced extremism and described their actions as a "mistake."
In addition to the other charges, Schneider also admitted to attempted murder for grabbing the handgun from a police officer while being captured and firing off a shot. No one was wounded.
Germany, which opposed the 2003 US-led invasion of Iraq but has more than 4,000 troops in Afghanistan under NATO command, has beefed up security and surveillance in response to the threat of Islamic militant attacks.
The closest it has come was in July 2006 when suitcases containing homemade bombs, placed on two regional trains at Cologne's main station, failed to detonate, averting an almost certain bloodbath. The two would-be bombers have since been sentenced to long prison terms in Germany and Lebanon.
The September 11, 2001 attacks on the United States were planned in part in the German port city of Hamburg by an al-Qaida cell led by Mohammed Atta, the hijacker of the first plane to strike New York's World Trade Center.