The head of the outlawed Harkatul Jihad al Islami (HuJI) outfit, Mufti Abdul Hannan, was among the eight sentenced to hang for planning and carrying out the bombing in Dhaka's main park.
It was one of the first deadly attacks by an extremist group in the country.
Metropolitan sessions judge Ruhul Amin also sentenced six others to life in prison for setting off two bombs under a tree while thousands of revellers celebrated the first day of the Bengali New Year in April 2001.
The attack was captured live on television, with the scenes of carnage triggering widespread outrage.
"The attack was carried out to destabilise the country and create panic," Judge Amin said as he delivered the verdict before a packed courtroom in Dhaka's old city.
"The first day of the Bengali New Year is a universal celebration. This celebration is not tied to any religious or political group," he added.
The Bengali New Year, celebrated on April 14, is the most important secular festival for the 155 million ethnic Bengalis in Bangladesh.
Hundreds of thousands traditionally gather and sing under a banyan tree in the capital's historic Ramna Park and the nearby grounds of Dhaka University.
Prosecutors said HuJI militants plotted the attack when they gathered at a mosque in Dhaka several weeks earlier.
"It was a heinous attack and unprecedented in our history," prosecutor Abdullah Abu told reporters after the verdicts were announced.
"We're happy with the eight death sentences, but not satisfied with the sentencing of six people who were given life terms. We'll appeal against the life sentences."
The HuJI chief, better known as Mufti Hannan, is already on death row after being convicted in 2008 of trying to assassinate the British high commissioner (ambassador) four years earlier in a grenade attack.
Bangladesh saw mass protests last year when several senior Jamaat leaders were sentenced to death after being convicted of war crimes dating back to the 1971 independence conflict.
On Tuesday the country's war crime court is set to deliver its latest verdict against the leader of the largest Islamic group Motiur Rahman Nizami for alleged atrocities during the 1971 war.
Experts say the death sentences against HuJI militants and their leader are unlikely to trigger new protests since the outfit ceased to be a major force after most of its leaders were arrested in a nationwide sweep back in 2005.
A lawyer for the defendants, Faruque Ahmed, told AFP he planned to appeal the verdicts which he said were politically motivated and designed to "make people happy in certain quarters".
Mufti Hannan, who fought alongside the Taliban in Afghanistan's civil war, is also accused of involvement in a 2004 plot to assassinate the current Prime Minister Sheikh Hasina when she was the opposition leader.
His organisation has also been linked to plots to blow up courts and other secular institutions, as well as Sufi shrines and a church.
The New Year bomb attack was among the first carried out by militant groups in Bangladesh, who want Sharia law introduced in place of the British origin common law.
The scale of the threat posed by militant groups was underlined in August 2005 when another banned outfit, Jamayetul Mujahideen Bangladesh (JMB), carried out more than 400 synchronised blasts in all but one of the country's 64 districts.
An elite security force was subsequently deployed to hunt down thousands of militants, including the top leadership of HuJI and the JMB. Six leaders of JMB were hanged in March 2007.
While there have been no major attacks by either since then, police say remnants of their networks are still operational.
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No way other than death penalty.Now need immediate execution.
Good for Bangladesh. Glad they are taking stern action against terrorists. The six that got life sentences also should have been given death sentences. There should be no leniency or mercy for these barbaric terrorists.
@ishrat salim: The moratorium is with actual carrying out the execution, not sentencing.
@ishrat salim: You seem to be confused. On the one hand you want Europe and America to put pressure on Bangladesh to convert death penalty to a life imprisonment; on the other hand you complain that out of death row prisoners in Pakistan, " most of them are hardened terrorists", "none have been sent to the gallows due to the pressure from international community.". In effect those prisoners in Pakistan are enjoying life imprisonment. Make up your mind: do you want your prisoners to be sent to gallows? If yes, then Bangladesh is doing exactly that. If not, then Pakistan is doing exactly that, not sending them to gallows. What is it you would like?
Pakistan is in dire need of importing some Judges from Bangladesh.
Is there no death moratorium as in Pakistan ? why the European Govt & America not put pressure to convert it into life long imprisonment....they have done that with us, why not them ? we have more than 300 + convicts on death row & most of them are hardened terrorists, yet none have been sent to the gallows due to the pressure from international community....no wonder our terrorists do not care because they know the will get convicted & stay put in one of the jails only to be attacked by their groups & taken away....