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Ali Hassan al-Majid will die by hanging, the state-run Al-Iraqiya television channel said, having been found guilty of the attack in the northeast of the country as the Iran-Iraq war drew to a close in 1988.
The ruling is the fourth time that Majid, better known by his macabre nickname, has received a death sentence.
Three-quarters of the victims at Halabja were women and children, in what is now thought to have been the deadliest gas attack ever carried out against civilians.
"This judgment is a victory for all Iraqis, humanity and the Kurds because Halabja is the biggest crime of modern times," said Majid Hamad Amin, minister of the martyrs and displaced in the Kurdish regional government.
"Halabja is not only a Kurdish case but it is an issue for all Iraqis and the rest of the world," he added.
A close cousin of Saddam, Majid earned his ghastly moniker for ordering poisonous gas attacks in a brutal scorched-earth campaign of bombings and mass deportations that left an estimated 182,000 Kurds dead in the 1980s.
He had already been sentenced to hang for genocide over the Kurdish offensives when in December 2008 he received a second death sentence for war crimes committed during the ill-fated 1991 Shiite uprising in southern Iraq.
And in March last year, the Iraqi High Tribunal handed down a third death sentence over the the 1999 murders of dozens of Shiites in the Sadr City district of Baghdad and in the central shrine city of Najaf.
However, he is probably best known for the Halabja attack when in March 1988, Iraqi jets swooped over the small town and for five hours sprayed it with a deadly cocktail of mustard gas and the nerve agents Tabun, Sarin and VX.
Majid was the King of Spades in the pack of cards of most wanted Iraqis issued by the US military in 2003 and was arrested in August of that year.
Like Saddam, Majid hails from the northern town of Tikrit, where he was born in 1941, according to court documents, although he told a tribunal last year that he was born in 1944.
Considered Saddam's right-hand man and bearing a strong resemblance to the former dictator, he was a member of the decision-making Revolutionary Command Council and regularly called upon to wipe out rebellion.
He was most infamous for his role in northern Iraq. In March 1987, the ruling Baath party put him in charge of state agencies in the Kurdish area, including the police, army and militias.
As Iraq's eight-year war with Iran drew to a close, fighters from the rebel Patriotic Union of Kurdistan, with backing from Tehran, took over the farming community of Halabja, near the border.
As Saddam's henchman, Majid then ordered the gas attack to crush the uprising.
New York-based Human Rights Watch has said Majid was responsible for the deaths or disappearances of around 100,000 non-combatant Kurds when he put down the revolt across the Kurdish region.
But Majid said he ordered the attacks against the Kurds, who had sided with Iran in the war, for the sake of Iraqi security. He has refused to express remorse for the killings.
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