Jose Ivan Jimenez Martin, 28, was spared the possibility of a 15-year jail sentence after being cleared of the more serious charge of homicide.
He was instead convicted of roofer Mr Mallon's manslaughter after a judge ruled he had provoked the holidaymaker's fall from a 13ft ledge during a mass attack by a gang of Spaniards armed with weapons.
Mr Mallon, 49, from Glasgow, died in hospital 11 days after suffering severe head injuries in the June 2009 fall in Competa near Malaga, where he owned a holiday home.
His sons Peter and Carl, who were 16 at the time, suffered broken bones after being punched and attacked with a metal pole and were left suffering post-traumatic stress.
Another two men were found guilty of assault with dangerous weapons in a 31-page written document released by Malaga's Criminal Court yesterday.
Luis Felipe Romero Allsop, convicted of hitting Carl Mallon with a metal bar and fracturing his right hand, was sentenced to two years in prison.
Juan Ortega Gonzalez, who prosecution lawyers wanted jailed for five years for smashing a bottle over Stephen Mallon's head, also received a two-year prison sentence.
The pair may escape jail because in Spain prison sentences of two years or less are normally suspended for first-time offenders, who pay compensation orders linked to their convictions.
Ten of the 12 other defendants tried last month over the violence that led to Mr Mallon's death were fined after being convicted of affray. Two were cleared.
Mr Mallon's widow Teresa last night criticised the sentences. She said: "They're disgusting to be honest. We will be reviewing the sentencing document to see where we go from here."
During the five-day trial Mr Mallon's sons said they were attacked by up to 40 men armed with coshes, knuckledusters, bottles and iron bars outside a disco-bar called La Estrella simply because they were British.
The defendants denied the claims and insisted they acted in self-defence after Mr Mallon started attacking them.
Some witnesses said the trouble started over a girl who used to date one of the accused.
Jimenez, accused of wilfully killing Mr Mallon, insisted he had only moved his arms about trying to defend himself after Mr Mallon punched him.
Lead judge Andres Rodero, one of three who presided over the trial, concluded in the written ruling: "We believe there is sufficient proof in relation to the origin of the fall, in the sense that it was provoked by the accused and not the result of a simple loss of balance."
The sentencing judges also ordered him to compensate Mr Mallon's widow, a hairdresser, with €120,000 (£96,000) and his three children with €90,000 (£72,000) each.
The 10 men convicted of affray will have to pay €10 (£8) a day over four months and face prison if they fail to do so.
Mrs Mallon, who has still not been able to cremate or bury her husband, said on the last day of the hearing last month that she felt let down by the lack of support from British diplomats and UK police.
She added: "We would be worried for anyone who went to Competa for a day, because they could be attacked by a mob of 30 armed men."
The charge of homicide in Spain is a halfway house between manslaughter and the more serious charge of murder and carries a 10- to 15-year prison sentence. A killing must be found to have been wilful for a homicide conviction.