Lieutenant Colonel Mario Pantoja was one of three commanding officers accused of ordering police to open fire to break up a demonstration over land reform.
About 1,500 landless peasant had been blocking a road in the town of Eldorado dos Carajas in the northern state of Para. Pantoja received 12 years in prison for each of the protesters killed.
He and his two colleagues are the first of a total of 149 policemen facing trial over the incident, in which 69 peasant workers were also injured.
Over the past 10 years, land disputes in Brazil have led to endemic violence in the countryside, with several hundred landless protesters being killed. But the 1996 killing is described as the biggest peasant massacre in Brazilian history.
Large trial
Pantoja and his two colleagues - Raimundo Lameira and Jose Maria Oliveira - were first tried in 1999 and acquitted for lack of evidence.
That ruling, however, was annulled months later.
The two-day hearing, in the northern state of Para, heard Pantoja, and Mr Lameira deny they had ordered the police to shoot - they insisted the first to be attacked had been the soldiers who had been hit with sticks and stones.
Mr Lameira was acquitted by a single vote by the seven-person jury.
The third defendant is to be judged next week.
Disputed facts
The trial is being seen as evidence of President Fernando Henrique Cardoso's willingness to prosecute members of the police force.
Mr Cardoso's policies have come under attack by the Landless Movement (Movimento dos Sem Terra or MST). In March 16, MST members were arrested for occupying the president's family farm.
MST leaders have threatened to occupy farms across the country.
They argue that occupying unproductive farms is the only way to push the government to carry out land reform in Brazil, where 20% of the population own 90% of farmland.
The government says it has already given land to half a million families in the last eight years - a figure disputed by the MST who say far fewer families have benefited.