Prosecutors said he awarded government rail contracts in return for bribes.
Liu is the most high-profile official to be tried and found guilty of corruption since Xi Jinping became China`s leader earlier this year.
Mr Xi has called for a crackdown on corruption, vowing to tackle it from the powerful "tigers" at the top to the "flies" at the bottom of the Communist Party.
China`s railways ministry, once a powerful department, was disbanded in March.
It had been criticised for a series of safety scandals, and faced allegations of fraud which were uncovered by government audits.
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