The attack left 37 people dead and came during the Guatemalan civil war pitting a rightist government against leftist rebels and people accused of supporting them.
Some 200,000 people were killed or vanished without a trace in the country's 1960-1996 civil war, according to a 1999 UN-sponsored report.
The convicted police chief, Pedro García, will only have to serve 30 years, however, because that was the maximum possible sentence at the time of the attack.
Protesters outside the court yelled "murderer, murderer."
Before the sentence was announced, indigenous people held a Maya ceremony with an altar holding flowers and candles.
Nobel peace laureate Rigoberta Menchu, whose father died in the attack, praised the verdict. "It is essential that we still create a drop of hope in justice," she said.
The embassy was attacked after Indians, peasants and students took refuge inside to protest army repression.
Garcia led a special police commando unit when the embassy was attacked and burned.