The Jamaican sprinter, 31, took the banned stimulant oxilofrine at last year’s national championships but the ban has been backdated from last year so will end on 20 December 2014.
Earlier on Tuesday, another Jamaican sprinter, Sherone Simpson, was also banned by the Jamaican anti-doping disciplinary panel.
Powell’s lawyer said he would appeal to the Court of Arbitration for Sport.
Simpson, an Olympic 4x100m relay gold and silver medalist, is a training partner of Powell and took the same substance at the same event.
They were joined by another Jamaican, Olympic discus thrower Allison Randall, who was also handed a two-year ban for using a prohibited diuretic on Tuesday.
The disciplinary measures are taken from when Powell and Simpson first provided a sample – 21 June 2013 – and the pair will now miss the Commonwealth Games in Glasgow in July.
The Chairman of the three-member disciplinary panel, Lennox Gayle, said: “The panel arrived at a unanimous decision, and it is a decision that in all the circumstances Mr Powell was found to be negligent and that he was at fault, especially in light of the fact he is an elite athlete.”
Powell, who was the biggest name in Jamaican sprinting before the rise of double world and Olympic champion Usain Bolt, missed last year’s World Championships in Russia as a result of his failed test.
In January he testified that Canadian physical trainer Chris Xuereb provided him with nine supplements, including Epiphany D1.
His legal team had presented three different laboratory reports that Epiphany D1 contained the stimulant oxilofrine.
However, the two-time 100m world championship bronze medallist told the hearing that he had failed to list them because he could not remember their names.
Xuereb has denied providing performance enhancing drugs.
Prior to the verdict, Powell’s coach Stephen Francis called on the Jamaican Prime Minister to disband the country’s anti-doping organisation and sub-contract the testing procedures to a credible overseas testing agency.
Earlier this year, the Court of Arbitration for Sport cleared two-time Olympic 200m champion Veronica Campbell-Brown of a doping violation.
Francis said: “After the Veronica Campbell incident, after the whole issue of not testing people, I think we need to get rid of these people.
“We need to go back to the days when we were tested from overseas. They need to sub-contract it to England or Germany or whoever it is who can carry it out properly because obviously we in Jamaica can’t do this thing properly.
“It is embarrassment after embarrassment after embarrassment.”
IAAF spokesman Chris Turner said there would be no comment from athletics’ world governing body while the case was still open.