Matthew Hedges, a 31-year-old PhD student in Middle Eastern Studies at Durham University, was arrested at Dubai Airport on May 5 and detained.
His wife Daniela Tejada, who was in court to hear the verdict, said she was in "complete shock".
Urging the British government to make a stand for him, she added: "I am very scared for Matt. I don't know where they are taking him or what will happen now. Our nightmare has gotten even worse."
A life sentence for a non-Emirati entails a maximum of 25 years in jail and is followed by deportation, according to state-run newspaper The National, which also said Hedges' devices and research would be confiscated.
UK politicians 'concerned' by verdict
Addressing Parliament, Prime Minister Theresa May said the British Government was raising Hedges' case with Emirati authorities.
"We are deeply disappointed and concerned at today's
verdict. We are raising it with the Emirati authorities at the highest level," she said.
Foreign Secretary Jeremy Hunt had travelled to the UAE to discuss the case with Crown Prince Mohammed bin Zayed and Foreign Minister Abdullah bin Zayed.
"Today's verdict is not what we expect from a friend and trusted partner of the United Kingdom and runs contrary to earlier assurances," Hunt said in a statement that underscored his surprise at the decision.
Mr Hunt said consular officials had been in close contact with the academic's family and the case would have consequences for bilateral relations.
"I regret the fact that we have reached this position and I urge the UAE to reconsider."
Britain had until now been reticent over the case, citing ongoing legal proceedings.
Officials have declined to comment on intelligence matters, in keeping with government policy.