Sri Lankan-born Pathmendra Pulendren acted as an Australian agent and arranged for the passage of 20 Tamil men aboard the Siev 46 from Malaysia in June 2009.
However, after learning that 194 people were to travel on the boat, the 36-year-old from Pendle Hill, in Sydney's west, became concerned and contacted police.
He has since pleaded guilty to facilitating the unlawful entry of people to Australia.
"He told police that he believed that the vessel was overcrowded and feared for the safety of the people on board," Sydney's Downing Centre District Court Judge Robyn Tupman said in sentencing on Monday.
The boat was subsequently intercepted on June 26, 2009, and found to be in an unseaworthy state and leaking from holes and gaps.
Pulendren, who purchased a spice shop in Sydney after working as a cleaner, came to Australia by boat in March 2007 as a Tamil asylum seeker and received a protection visa after a stint on Christmas Island.
His voyage cost US$15,000 and Judge Tupman said the married father-of-one also owed a debt to his wife's family.
Pulendren was financially motivated to become a people smuggling agent and was set to receive US$2,000 for each of the 20 people he acted for, the court was told.
"The offender in his evidence has agreed that some (people) sought his assistance because he made it known throughout the Tamil community in Sydney that he was able to provide this service," Judge Tupman said.
She described as "significant" Pulendren's role in the people smuggling event, adding that his sentence must "carry a strong message of general deterrence".
Pulendren was sentenced to five years and six months jail with a non-parole term of three years.
Taking into account time already served, he will be eligible for release in November 2012.
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