General Cheyre, 70, was sentenced to three years and a day under house arrest following a judicial inquiry.
He is the first head of the Chilean Army to be condemned for human rights violations committed during Augusto Pinochet's dictatorship (1973-1990).
In the same ruling, Chilean judge Mario Carroza sentenced 11 other retired soldiers to prison for their roles in the murder of 15 opposition members, committed by the so-called "Caravan of Death," a military unit sent to remote areas to hunt down opposition activists on orders from General Pinochet.
The murders took place a month after the military coup that ousted democratically-elected president Salvador Allende and brought General Augusto Pinochet to power.
In his ruling, judge Carroza stated: "does the scenario of global conflict excuse human rights violations? My response is one and unequivocal: "No, human rights violations never and for anyone can have ethical justification." He also urged Cheyre to meet with the relatives of his victims and apologize in
Cheyre is the most senior figure so far to be held accountable for abuses committed after Pinochet took power.
The 15 victims were executed and their bodies were thrown into a common grave in the local cemetery in the northern city of La Serena.
The next day, the authorities published a military note in which they reported the execution "of 15 extremists, in compliance with the decisions of military courts in times of war."
However, there was no court decision as there was no trial.
The victims' remains were found and identified 25 years later, in 1998.
Alicia Lira, president of the Group of Relatives of Executed Politicians (AFEP), said the ruling was a good news "despite it not being the sentence we wanted against Cheyre."
According to official data, from 1973 to 1990 the Pinochet regime killed some 3,200 people. Of those murdered, 1,192 are still listed as disappeared.