The veteran, known as Soldier F, will face prosecution for the murders of James Wray and William McKinney and the attempted murders of Joseph Friel, Michael Quinn, Joe Mahon and Patrick O’Donnell in Londonderry in 1972.
Sixteen other former soldiers and two suspected ex-members of the Official IRA, all of whom were also investigated as part of a major police murder probe, will not face prosecution, the PPS said.
Thirteen civil rights demonstrators were shot dead on January 30 1972, on one of the most notorious days of the Northern Ireland Troubles.
Families gathered to give their reaction in Derry’s Guildhall.
John Kelly, whose 17-year-old brother Michael was killed, said many had received a “terrible disappointment”.
But he welcomed the positive news for the six families impacted by the decision to prosecute soldier F.
“Their victory is our victory,” he said.
“We have walked a long journey since our fathers and brothers were brutally slaughtered on the streets of Derry on Bloody Sunday, over that passage of time all the parents of the deceased have died - we are here to take their place.”
Mr Kelly highlighted there were legal means of challenging the decisions not to prosecute.
“The Bloody Sunday families are not finished yet,” he said.
Defence Secretary Gavin Williamson said the Ministry of Defence would fund Soldier F’s legal costs.
He said: “We are indebted to those soldiers who served with courage and distinction to bring peace to Northern Ireland.”