The former managing director of China's Hanlong Mining, Steven Xiao, has been sentenced to eight years and three months jail for insider trading following a five-year long investigation by the corporate watchdog.

The sentence handed down in the New South Wales Supreme Court on Friday is the largest ever in Australia for insider trading. It also marks the end of one of the Australian Securities and Investments Commission's biggest investigations.

Steven Xiao was extradited to Australia in October 2014 facing charges relating to more than 100 illegal trades in miners Sundance and Bannerman.

Xiao's sentence marks yet another development in the Hanlong Mining saga that has led to several arrests in Australia. At the same time the company has been linked to one of the biggest corruption cases in China's history.

Last year, the billionaire founder of Hanlong parent Sichuan Hanlong Group, Liu Han, was executed in China after being found guilty of a suite of crimes including murder, running illegal casinos and selling firearms while he was head of one of the country's largest mafia outfits.