American Amanda Knox was found guilty early Saturday of murdering and sexually assaulting her British housemate Meredith Kercher in 2007 and sent to prison for 26 years.
Knox's then-boyfriend and co-defendant Raffaele Sollecito was also found guilty and imprisoned for 25 years.
Knox, 22, cried out "no, no" and broke into sobs when the judge began reading out the lengthy verdict, while 25-year-old Sollecito's face was blank as his sister called to him, "have courage".
Knox's mother Edda Mellas was shaking with grief as her stepmother Cassandra Knox moved to comfort her.
Judge Giancarlo Massei cited extenuating circumstances for reducing the sentence from the maximum life terms sought by the prosecution.
The defendants were ordered to pay one million euros (1.5 million dollars) to each of the victim's parents, plus 800,000 euros to each of Kercher's three siblings -- two brothers and a sister.
The Kercher family had sought 25 million euros in damages.
Their lawyer Francesco Maresca told reporters the verdict "did justice to Meredith Kercher's memory," adding that the family was "fully satisfied" with the judgement and "acknowledged the fine work of the investigation and trial."
The Kercher family were to meet the press on Saturday.
The six jurors and two judges deliberated for some 12 hours before reaching the verdict.
Prosecutors presented DNA and other forensic evidence against Knox, Sollecito and a third person, Rudy Guede of Ivory Coast, who was convicted separately after opting for a "fast-track" trial in exchange for clemency.
The prosecution alleged that the three youths were high on drugs when they tried to engage Kercher, 21, in a sex game that turned violent, leaving her dead with stab wounds to the neck.
Knox and Sollecito, the Italian engineering student she fell in love with just a week before the grisly murder, went on trial in the central Italian university town of Perugia in January, more than a year after the murder on November 1, 2007.
The defence insisted that Guede, described as a drifter who was taken in by a Perugia family who have since broken ties with him, was the sole killer.
Guede, now 22, is appealing his 30-year sentence.
Cassandra Knox said "we will fight to the end, it's not over yet."
Amanda Knox was also found guilty of defaming her former part-time employer Patrick Lumumba, whom she accused of the murder early in the investigation.
The Congolese immigrant who ran a bar in Perugia spent two weeks in jail before being freed without charge.
An extra year was added to Knox's sentence for this charge.
Knox and Sollecito's lawyers had described them as "lovebirds" in the flush of early romance in this centuries-old university town nestled in the Umbrian hills.
Prosecutors said Sollecito, the son of a prominent urologist who completed his engineering degree while in custody, was in Knox's thrall.
The murder sparked lurid headlines around the world, notably in Britain, fed by rampant rumours as well as repeated leaks to an eager press corps during the investigation.
Knox charged that aggressive police questioning led her to accuse Lumumba during 54 hours of questioning over a four-day period.