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It is the first verdict he has received since his overthrow and is one of several trials he faces.
Morsi was deposed by the military in July 2013 following mass street protests against his rule.
Since then, the authorities have banned his Muslim Brotherhood movement and arrested thousands of his supporters.
Morsi and 14 other Brotherhood figures escaped a more serious charge of inciting the killing of protesters, which could have carried the death sentence.
Most of the other defendants were also given 20-year prison sentences. Morsi's legal team have said they will appeal.
This verdict is just one of several Mr Morsi faces. They include:
What's become of Egypt's Morsi?
Morsi stood accused of inciting supporters to kill a journalist and opposition protesters in clashes outside the presidential palace in late 2012.
As crowds grew outside the palace, Morsi ordered the police to disperse them.
They refused, so the Muslim Brotherhood brought in their own supporters. Eleven people died in the ensuing clashes, mostly from the Brotherhood.
Hearing the verdict, Morsi and the other defendants gave a four-fingered salute, a symbol of the deadly clearance of Brotherhood supporters at the Rabaah al-Adawiya mosque in 2013.
A senior Brotherhood figure, Amr Darrag, called the ruling a "travesty of justice".
"They want to pass a life sentence for democracy in Egypt," he said.
Ramy Ghanem, a lawyer for one of those injured in the clashes, expressed surprise that Morsi escaped the more serious charge, but told the AFP news agency the sentences are "not bad".
However the brother of one of the victims said he wanted to "enter the cage and pull out his [Morsi's] intestines", according to Reuters.
Morsi has rejected the authority of the courts, shouting during his first trial that he was the victim of a military coup.
On Monday, a court sentenced 22 Muslim Brotherhood supporters to death for an attack on a police station in Cairo, part of an ongoing crackdown against the Islamist movement.
Morsi was Egypt's first freely-elected president, but protests began building less than a year into his rule when he issued a decree granting himself far-reaching powers.
A court dropped charges of conspiracy to kill protesters against Morsi's predecessor, Hosni Mubarak, last year.
An Egyptian court has sentenced ousted President Mohammed Morsi to 20 years in jail for ordering the arrest and torture of protesters during his rule.

Teenager Jones, 18, initially joined City on an emergency loan in March, making six first-team appearances.
But, prior to that, he had already clocked up 40 appearances in all competitions in little over a year for the Daggers, scoring four goals.
Dagenham & Redbridge Academy product Jones' new contract with City will officially start on 1 July.
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"It got a little bit tight at the end," City manager Tony Mowbray told BBC Coventry & Warwickshire.
"After playing for us, a few clubs became even more alert than they already were and were potentially trying to hijack a deal, but Dagenham and Jodi and his family remained loyal to our agreements.
"I like his directness and his positive play. We can develop him. He can become a goalscorer as well. He can dribble around the end of the box, get a yard and shoot with his left foot. We're excited about him.
"I'm just trying to find some footballers that the club can invest in and give them two, three and four-year contracts, then you can have a continuity to the team."
Technical Director Mark Venus added: "This is the most valuable transfer for the club for a number of years. We need deals like this to help progress to the next level. We've been able to beat a number of other clubs to his signature."
Find all the latest football transfers on our dedicated page.
Coventry City have signed Dagenham & Redbridge winger Jodi Jones on a four-year deal for an undisclosed fee.

Carbisdale Castle, near Ardgay in Sutherland, is owned by the Scottish Youth Hostel Association (SYHA).
It stopped running the property five years ago and a deal to sell it to a developer fell through this month.
Selling agents Savills have put the category B listed 40-bedroom castle on the market for offers over Â£900,000.
The previous asking price was offers over Â£1.2m.
Its ghost is well-known among people who have stayed at Carbisdale when it was a hostel. SYHA even dubbed one of the top-floor bedrooms as the "spook room" because of claims it was haunted.
Betty is said to appear dressed in white in various parts of the property.
The ghost does not get a mention in the sales material.
The castle and its entrance gates are listed as category B, which means they are structures of regional historical importance.
The Dowager Duchess of Sutherland had Carbisdale Castle built near Ardgay between 1907 and 1917 following the death of her husband, George Granville William Sutherland-Leveson-Gower, the Third Duke of Sutherland.
Lady Mary was the duke's second wife and after he died she became embroiled in a legal dispute over his will with her stepson, the fourth Duke of Sutherland.
When the row was settled the duchess used her inheritance to have Carbisdale constructed.
During World War Two, King Haakon VII of Norway and Crown Prince Olav were given sanctuary at the castle during the Nazi occupation of Norway.

A former stately home said to be haunted by a ghost called Betty has been put back up for sale after a plan to turn into a hotel was abandoned.

