Children between two months and seven years-old, died from renal failure after taking the painkiller which was found to contain high levels of diethylene glycol, a poisonous solvent mostly used in brake fluid and as an engine coolant.
Federal High Court Judge Okechukwu Okeke convicted Adeyemo Abiodun and Egbele Austine Eromosele of "conspiracy" and "selling dangerous drugs" to a Lagos-based pharmacy.
They were charged in March 2009.
He ordered the closure of the Lagos-based Barewa Pharmaceutical Limited, the manufacturer of My Pikin Baby Teething Mixture, and its assets freezed.
The judge sentenced the pair to "seven years imprisonment" on the two counts, noting that a lighter term was given following pleas for mercy.
Fake and adulterated drugs are common in Nigeria because of the high cost of imported brands.
Officials have estimated that more than half of the drugs sold in Nigeria are either fake or adulterated.
In 1990, 109 children died after taking paracetamol laced with a different compound similar to diethylene glycol and also used in engine coolants.