Jean-Claude Mignon, President of the Council of Europe's Parliamentary Assembly, urged Ukraine to free him.
Lutsenko, who served under jailed former Prime Minister Yulia Tymoshenko, was sentenced on Monday to four years for abuse of office and embezzlement.
He maintains his innocence, saying he is the victim of a show trial.
Lutsenko was convicted of giving illegal bonuses and perks to his driver at the expense of the state.
He was also ordered to pay the equivalent of $116,000 (£73,000; 86,000 euros) to compensate for misused funds, including some spent on celebrating the police force's professional day.
Tymoshenko was jailed for seven years in October for abuse of office, at a controversial trial.
She and Lutsenko were allies during the Orange Revolution which overturned the discredited presidential election result of 2004, ejecting Viktor Yanukovych from office.
However, Mr Yanukovych won legitimately the last presidential election, two years ago, defeating Tymoshenko.
Mr Mignon said the charges on which Lutsenko was convicted were "absolutely no justification for a prison sentence", and he suggested that the trial had been politically motivated.
"It is unacceptable for former members of the government of a Council of Europe member state to be prosecuted for political reasons," he said.
"This practice is contrary to the rule of law and takes Ukraine further away [from] the principles of our organisation as well as the European integration to which this country aspires."
Both Lutsenko and Tymoshenko were, Mr Mignon said, victims "of a policy pursued by the present government in an effort to call into question decisions taken by a previous government".
The US has said it is "disappointed" by Lutsenko's conviction and also called for his release.
"The politically motivated prosecution of opposition leaders, including Mr Lutsenko and former Prime Minister Yulia Tymoshenko, raises serious concerns about the government of Ukraine's commitment to democracy and rule of law," said state department spokeswoman Victoria Nuland.
Tymoshenko herself praised her former minister for his courage on trial and said she and other political prisoners were struggling for "liberation" from President Yanukovych's rule.
"Today we are behind bars," she was quoted as saying by Interfax-Ukraine news agency.
"But if this is the price we should pay for the liberation of the country, we agree to pay it. Yura [Lutsenko] will agree with me, I know."
Source: BBC News