The general, Stanislav Galic, rained sniper fire and shells on the Muslim sector of the city that killed hundreds of people and wounded thousands, the conviction said.
By a two-to-one decision on Friday, the United Nations war crimes tribunal said Galic, 60, ordered his troops to fire on civilians while they were shopping, tending gardens, fetching water from the river or going about their daily lives.
It was the first decision at the UN court for the former Yugoslavia dealing exclusively with the siege of Sarajevo during the 1992-1995 Bosnian war that brought the world images of "Sniper Alley" and corpses of children killed by shells while playing in the snow.
Presiding judge Alphons Orie said the attacks had "the primary purpose of spreading terror."
Galic deliberately sought out
Galic was convicted on five counts of crimes against humanity and war crimes during the period he commanded the siege from 1992 to 1994, the tribunal ruled.
The siege continued for another year after Galic left the Romanija Corps encircling the city.
Serb gunmen held positions in the hills which surround the city, cutting its residents off from food and medical supplies. They fired through windows into apartment buildings, killing people while they cooked, ate, or even attended funerals.
Galic looked impassive as presiding justice Alphons Orie read out the 20-year sentence and guilty verdict.
The court rejected defence arguments that civilians were accidentally killed during legitimate attacks on military targets, and that some were killed by fire from the Bosnian Muslim army in Sarajevo.
The attacks were mostly in daylight, rarely in response to attacks, and deliberately sought out civilian targets, the judges ruled.
"No civilian of Sarajevo was safe anywhere," a summary of the 300-plus page judgment said.
Civilians were killed as they went
about their normal activities
The court held Galic personally responsible, saying that he not only was aware of the "unlawful acts of his troops," but that he dictated "the scale and pace of those crimes."
The court cited dozens of mortar attacks, including the Markale market massacre that killed 60 people in one devastating blast. The court was "convinced that civilians were attacked directly and without distinction," the ruling said.
Dissenting judge Rafael Nieto-Navia of Colombia said prosecutors had failed to prove beyond a reasonable doubt that Galic intentionally targeted the civilian population.
Some evidence proved the opposite, he said, namely that Galic had ordered his forces to abide by the Geneva Conventions.
"The evidence leads me to conclude that the ... forces under Gen. Galic did not engage in a campaign of purposefully targeting civilians," he said.
He did however accept that Galic's forces fired "deliberately or recklessly" on the civilian population and he should be convicted of murder and sentenced to 10 years imprisonment.
It was the first time the court dealt with the charge of terror, as defined in the 1949 Geneva Conventions. The judges ruled that "the international tribunal does indeed have jurisdiction over the crime of attack on civilians" and the crime of terror, which has an "additional mental element."
"The attacks had the primary purpose of spreading terror"
The 44-month blockade of Sarajevo left thousands dead during the 1992-95 war in Bosnia.
It was one of the darkest aspects of the war. Nearly 12,000 people including 1500 children died in the 44-month period, according to the Helsinki Committee for Human Rights.
In all some 340,000 people, Muslims as well as Bosnian Serbs and Croats, lived within the Bosnian government lines in Sarajevo during the period, prosecutors said.
The defence insisted after his 17-month-trial, which opened in December 2001, that Galic should be acquitted because there was no evidence that the general had ordered his troops to target civilians.
They also played down the siege saying the media exaggerated events and suggested that some of the incidents were the result of Bosnians shelling their own people to win the sympathy of the international community.