Judge Miguel Angel Galvez ruled that Rios Montt could be tried on charges of genocide and crimes against humanity for the killing of 1,771 indigenous Ixiles in 1982 and 1983, when he was president.
The decision clears the way for a three-judge panel to hear the evidence against Rios Montt and decide to either judge him guilty and sentence him, exonerate him of the charge or start a public trial.
Prosecutors allege that after leading a March 1982 coup and seizing control of the government, Rios Montt oversaw torture, rape, forced disappearances and forced relocations and killings of thousands of Ixil people by soldiers, paramilitaries and other government officials.
His lawyers have sought to block the trial, arguing that he is protected by an amnesty law.
The attorney-general's office said that it found evidence of 5,271 killings of Ixil residents of the towns of San Juan Cotzal, Santa Maria Nebai and San Gaspar Chajul in the department of Quiche. Prosecutors said 1,771 died in some 15 massacres between 1982 and 1983, and 370 bodies have been identified.
Prosecutor Orlando Lopez said during hearings before Monday's decision that Rios Montt wanted to wipe out the Ixil people, considered a bastion of support for guerrilla fighters waging a civil war against the Guatemalan state.
"During the period in which you held office, it is believed that the actions carried by members of the Guatemalan Army, military official and civil defense patrolmen resulted in the deaths of 1,771 people," the complaint against Rios Montt reads.
The prosecution case includes forensic reports documenting hundreds of deaths.
Among the testimony presented to the judge was that of Ana Lopez, an Ixil woman taken from her home by soldiers in May, 1982 to a government outpost where she was tortured and raped for 10 days.
During the 1960-96 civil war, more than 200,000 people, mostly Mayan Indians, were killed or went missing and entire villages were exterminated, according to the United Nations.