The Metropolitan Police broke health and safety laws when they shot Brazilian Jean Charles de Menezes on 22 July 2005, a jury decided.
The Met's commissioner Sir Ian Blair said he would not be standing down.
The Old Bailey jury said police chief Cressida Dick, who led the operation, bore "no personal culpability".
The force has been fined £175,000 and ordered to pay £385,000 in costs.
The unprecedented, highly controversial trial came after prosecutors said that no individual officer could be held responsible for the electrician's death.
Instead, they said the force, represented by the Met Commissioner's Office, should be tried for failing to protect the public from the risks posed by a suspected suicide bomber on the loose.
The Met vehemently denied the allegation during the trial, saying that there was no case for it to answer.
In a statement, Len Duvall, chair of the Metropolitan Police Authority (MPA), said policing in London was "a tough business".
"We ask the police to do a difficult job on our behalf and sometimes they make mistakes," Mr Duvall said.
The MPA said it fully supported Sir Ian and would continue to work with him.
But the Liberal Democrats and Conservatives have called for the commissioner to resign.
Nick Clegg, Lib Dem home affairs spokesman, said: "This guilty verdict makes it unavoidable that Ian Blair should take responsibility on behalf of his whole organisation and resign."
During the trial, Clare Montgomery QC, prosecuting, told the jury that Scotland Yard commanders had made a string of errors on 22 July that culminated in an unwarranted risk to the public and ultimately the death of Mr de Menezes.
Sir Ian had warned before the trial began that a guilty verdict would have profound effects on policing.
He said officers would be left in a difficult position of not being able to use their judgement in emergency situations, out of fear of breaking the law.
After the verdict was delivered, Mr Justice Henriques said: "This was very much an isolated breach brought about by quite extraordinary circumstances.
"One person died and many others were placed in potential danger."
In deciding on a penalty, the judge said he was aware that a heavy fine would result in a loss to the public purse and a reduction in essential policing.
The operation began when detectives investigating the failed suicide bombings of the previous day linked one of the suspects, Hussain Osman, to a block of flats in south London.
Mr de Menezes also lived in the block, and when he left home at 0930 BST, surveillance officers were unsure if he was their target.
Ms Montgomery told the court the situation had worsened because senior officers failed to keep to their own agreed plan, while firearms teams were both poorly briefed and in the wrong locations.
This meant that it became impossible to effectively stop the suspected suicide bomber before he boarded a bus and headed for the underground system.
The Met denied this, saying its commanders and officers on the ground did all they could to apprehend the bombers and minimise the risks to the public.
The trial and investigation is estimated to have cost around £3.5 million in public money.
Published: 2007/11/01 15:28:32 GMT
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