The emissions were sometimes 30 times higher than permitted under US rules.
Volkswagen sold almost 600,000 vehicles with the devices in the US between 2006 and 2015, and about 11 million globally. The allegations have also prompted probes in other countries and led to arrests in Germany.
'I made bad decisions'
Mr Schmidt, who led the firm's environmental and engineering office in Michigan, learned of the cheating scheme in 2015, according to court documents.
He pleaded guilty to conspiracy and violating the Clean Air Act in August.
His attorney had urged the court to deliver a lesser punishment, saying he had played a minor role in the scheme compared to more senior people at the company.
But Michigan-based US District Judge Sean Cox sentenced Mr Schmidt to the maximum sentence proposed by prosecutors, who had already dropped some charges against Mr Schmidt in exchange for the guilty plea.
"I made bad decisions and for that I am sorry," Mr Schmidt said in court on Wednesday, according to Reuters.
Mr Schmidt, a German national, is one of eight current and former VW officials charged in the US in the diesel emissions scandal.
James Liang, a former engineer, was sentenced to more than three years in August.