A Virginia jury on Tuesday deliberated for close to nine hours on options that included the death penalty for two counts of murder before ordering life in prison for the teenaged killer.
Malvo, whom the same jury convicted last week of the murder of FBI analyst Linda Franklin, 47, sat with one arm resting on the defence table and the other covering his mouth as the sentences were read out.
He faces four possible capital murder charges in other states where he and John Allen Muhammad have been linked to shooting deaths, including in Alabama and Louisiana.
Muhammad, 42, who was convicted of another murder in the series of shootings, had been sentenced to death.
Malvo was also fined a total of $200,000. The formal sentencing date has been set for 10 March 2004.
In closing arguments on Monday, defence lawyer Craig Cooley had urged the jury to spare the life of "this child," who, he said, had been led terribly astray by Muhammad whom he trusted as a father figure.
"He (Malvo) does have remorse," Cooley told reporters, adding that Malvo's remorse would increase, as he underwent therapy in jail to overcome what a psychologist testified was a mental disorder that caused him not to know right from wrong.
Victims' kin disappointed
Vijay Walekar, the brother of one of the 10 sniper victims, told reporters afterwards that he was "not at all pleased" with the outcome.
"I wish he would have gotten the death sentence," Walekar said. "We go through the pain and suffering every day."
Victoria Buchanan Snyder, brother of Sonny Buchanan, one of the 10 dead, said, "There cannot be another case more deserving of the death penalty but I respect the jury's decision."
"Was Malvo less guilty than Muhammed? I don't think so. They did exactly the same thing. That is why we are expressing our disappointment"
Paul Laruffa, who was wounded by a bullet shot said, failure to give Malvo the death penalty "minimises what this man did".
"Was Malvo less guilty than Muhammed? I don't think so. They did exactly the same thing. That is why we are expressing our disappointment."
In coming to its decision, the 12-person jury found that the crimes were vile or inhuman and that Malvo could commit future acts of violence and posed a continuing danger to society.
But it took into account mitigating evidence which included Malvo's youth and unsettled childhood.