Retired General Efrain Rios Montt, 86, was convicted of ordering the deaths of 1,771 people of the Ixil Maya ethnic group during his time in office in 1982 and 1983.
Survivors described horrific abuses committed by the army against those suspected of aiding left-wing rebels.
Efrain Rios Montt had denied the charges, saying he neither knew nor ordered the massacres while in power.
He is expected to appeal against the court’s decision on the grounds of his age.
Efrain Rios Montt’s former chief of military intelligence, Mauricio Rodriguez Sanchez, who was on trial with him, was acquitted.
It is the first time a former head of state had been found guilty of genocide by a court in his or her own country.
Other genocide convictions have been handed down by international courts.
Relatives and indigenous leaders cheered when the sentence was read out by Judge Jazmin Barrios in Guatemala City.
Efrain Rios Montt was sentenced to 50 years for genocide and 30 years for crimes against humanity.
“The Ixils were considered public enemies of the state and were also victims of racism, considered an inferior race,” Judge Barrios said.
“The violent acts against the Ixils were not spontaneous. They were planned beforehand.”
It is a historic decision and a huge breakthrough for human rights in the region.
During the nearly two-month trial, dozens of victims gave harrowing testimony about atrocities committed by soldiers.
An estimated 200,000 people were killed in Guatemala’s 1960-1996 civil war, the vast majority of them indigenous Mayans.
Prosecutors said Efrain Rios Montt presided over the war’s bloodiest phase. They said he turned a blind eye as soldiers used rape, torture and arson against those suspected of supporting leftist rebels.
The trial has been beset with delays, legal loopholes and a temporary suspension.
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