Giving his order, US district judge Harry D Leinenweber said "He commits crime, cooperates and then gets rewarded for the cooperation.
"No matter what I do it is not going to deter terrorists. Unfortunately. Terrorists do not care for it. I do not have any faith in Mr Headley when he says that he is a changed person now.
"I do believe that it is my duty to protect the public from Mr Headley and ensure that he does not get into any further terrorist activities. Recommending 35 years is not a right sentence.
"I will accept the government motion 35 years and sentence of 35 years and supervised release for life".
A week back, Judge Leinenweber had sentenced 52-year-old Headley's school time friend, Tahawwur Rana, for 14 years of imprisonment followed by three years of supervised release for providing material support to LeT and planning terrorist attack against a Danish newspaper in Copenhagen.
Under a plea bargain, death sentence for Headley was already knocked down. But many were left surpised when the US prosecutors did not seek life sentence for Headley.
Headley was sentenced on 12 counts. Those included conspiracy to aid the Pakistani group Lashkar-e-Taiba, which mounted the attacks on the landmark Taj Mahal Hotel and other targets.
Both Headley and Rana were arrested in 2009. Headley was small-time narcotics dealer turned US's Drug Enforcement Agency (DEA) informer who went rogue.
In their closing argument, US attorneys Daniel J Collins and Sarah E Streicker had sought between 30 and 35 years of imprisonment for Headley.
His attorneys Robert David Seeder and John Thomas had sought a lighter sentence arguing the amount of information he provided to the US government against terrorist organisations like LeT and several of its leaders.
Headley has confessed that he had undertaken numerous scouting missions for his handlers in Pakistan. He had videographed a number of targets in India including the iconic Taj hotel in Mumbai which was attacked by 10 LeT terrorists.
According to security agencies, the detailed videos made by Headley was the foundation on which the Mumbai attacks was planned and carried out.
Headley had even changed his name from Daood Gilani in 2006 to easily move in and out of India without raising suspicision.
The US attorneys argued that while there is no question that Headley's criminal conduct was deplorable, his decision to cooperate, provided uniquely significant value to the US government's efforts to combat terrorism.
"We are seeking less than life time sentencing, because of the significant intelligence value information provided by Headley. Crime is deplorable, shocking and horrific.
"I am not going to find the words to describe the Mumbai terrorist attack– the job is to balance the how serious the crime was and the information he provided immediately after his arrest.
"We have to recognize the significant value of the information. We believe that 30-35 years of imprisonment would be justified and balance and thus be downgraded from life sentence," Collins said.
In addition to providing insight into the personnel, structure, methods, abilities and plans of LeT, Headley took active steps to further the investigation into other terrorists including his handler Sajid Mir.
Mir was a senior Lashkar leader who was one of the main architects of the Mumbai attacks and acted as one of the controllers providing directions to the ten attackers.
Sajid was Headley's handler. Abu Qahafa, a senior Lashkar member who provided combat and other training to the ten attackers, acted as one of the controllers.
Headley's cooperation assisted the government in filing criminal charges against at least seven other individuals, and his testimony helped to secure the conviction of one co-defendant, federal prosecutors said.
Federal prosecutors also pointed Headley cooperated with Indian investigating agencies for seven days and that he has agreed to provide co-operation in the future as well through various means including videoconferencing.
But his extradition has been ruled out.
"As the Court knows, Headley's testimony helped secure a conviction against (Tahawwur) Rana. Further, Headley has agreed to provide truthful testimony in any proceeding in the United States if called upon by the United States Attorney's Office, as well as any foreign judicial proceeding held in the United States by way of deposition, videoconferencing or letters rogatory," Collins said.
Earlier in the day, a US federal court in Chicago had started the sentencing hearing of the LeT operative convicted of involvement in the 2008 attacks.
The hearing started before the court of US district judge Harry D Leinenweber in downtown Chicago amidst an unprecedented security.
According to court officials several hundred people lined up before the court room ahead of proceedings, delaying the start by around 30 minutes.
Sniffer dogs were deployed and every individual was thoroughly checked before they were allowed to enter the court room by security personnel.
No electronic device, cellular phone, i-pads and recording devices were allowed inside the court room – which was opened on a first-cum-first serve basis.
A battery of national and international mediapersons who arrived in Chicago for the hearing in the closely followed case were among those trying to enter the court room.
A large number of people had to be denied entry as the courtroom was full to its capacity.
A small-time US drug dealer-turned-terrorist plotter who helped plan the brutal 2008 attack on Mumbai was learning on Thursday whether his wide-ranging cooperation with US investigators will earn him any leniency as he faces sentencing.
Headley, 52, faced the sentence for his role in a three-day rampage in which 10 gunmen from a Pakistani-based militant group fanned out across Mumbai, attacking a crowded train station, Taj Mahal Hotel and other targets. Around 160 people were killed, including children.
Prosecutors, though, were asking for a relatively lenient term of 30 to 35 years, which leaves open the possibility that one day Headley could go free.
Headley seemed to jumped at the chance to spill secrets following his 2009 arrest and continued providing details even after the US government agreed not to seek death penalty in exchange for his cooperation.
Prosecutors say Headley, who was born in US to a Pakistani father and American mother, was motivated in part by his hatred of India which goes back to his childhood.
He changed his birth name from Daood Gilani in 2006 so he could travel to and from India more easily to do reconnaissance without raising suspicions.
He never pulled a trigger in the attack that's been called India's 9/11, but his contribution to the Pakistani-based militant group Lashkar-e-Taiba made the assault more deadly.
He conducted meticulous scouting missions - videotaping and mapping targets - so the attackers who had never been to Mumbai adeptly found their way around.
"What he did was unfathomable," said James Kreindler, an attorney for relatives of US victims.
"Imagine what is going through a person's mind who is videotaping these places knowing what will happen there later."
One woman whose husband and daughter were killed said a lighter sentence would be "an appalling dishonor" to those killed.
"I feel that for the magnitude of the killings that took place, David Headley has lost his right to live as a free man," said Kia Scherr, who is currently in Mumbai. "This would be a moral outrage that is inexcusable."
Prosecutors also have praised Headley for testifying against Tahawwur Rana, a Chicago businessman convicted of providing aid to Lashkar and backing a failed plot to attack a Danish newspaper for publishing depictions of the Prophet Muhammad. Rana, sentenced last week to 14 years in prison, claimed his friend Headley duped him.
Testifying at Rana's trial in 2011, Headley spoke in a monotone voice, seemingly detached, as he described one proposal for the never-carried-out Danish plot to behead newspaper staff and throw their heads onto a street.
In video excerpts of his interviews with the FBI after his arrest, Headley appears flippant, cool and calculating.
As he revealed Rana's name, he told an investigator in an upbeat voice, "That probably is going to be good for me. Also for you."
In big cases where suspects cooperate, prosecutors often ask for leniency. It's both a reward and a message to future suspects that they, too, could get a break if they spill their secrets.
Still, for a reviled figure like Headley to get a sentence less than sentences routinely given to convicted drug traffickers or child pornographers could prompt criticism.
Prosecutors seemed to anticipate that in their filing, acknowledging that, "Determining the appropriate sentence for David Headley requires consideration of uniquely aggravating and uniquely mitigating factors."
Prosecutors have recounted only in broad terms how Headley has shed light on the leadership, structure and possible targets of Lashkar-e-Taiba, which was believed to have ties to the Pakistani intelligence agency, known as ISI.
Headley has said his ISI contact was a "Major Iqbal," who was named in the indictment that charged Headley.
Seth Jones, a RAND Corp. political scientist, agreed that Headley must have provided useful insight for US intelligence, especially about how Pakistani intelligence agents allegedly reach out to people like Headley.
"From my perspective, this was pretty detailed information about one ISI contact (Headley) with one handler, Iqbal," Jones said. But he added Pakistani intelligence would have been careful not to reveal too much to Headley, saying, "They didn't trust him either."
For his cooperation and guilty plea to 12 counts, Headley secured both a promise that he would not face the death penalty and would not be extradited to India. Late last year, India secretly hanged the lone gunman who survived the Mumbai attack, Mohammed Ajmal Kasab.
The 12 counts Headley pleaded guilty to included conspiracy to commit murder in India and aiding and abetting in the murder of six Americans, who included Alan Scherr and his 13-year-old daughter, Naomi.
Scherr and her family were in India for a two-week spiritual retreat and were staying at the Oberoi Trident Hotel, one of the sites that came under assault.
After the attack, Scherr helped start an organization called the One Life Alliance, which seeks to work against terrorism by promoting understanding and respect for the sacredness of life.
"This is how I am surviving this event, which erased life as I knew it," she wrote in an email from Mumbai, where she continues to travel to for charity work.
Survivor Andreina Varagona described in a presentencing filing dining with the Scherrs at the hotel restaurant when gunmen burst in. Bullets tore apart the room as they dove under a table, the girl screaming.
"I suddenly felt the warm spray of blood on my face and in my hair. ... Naomi's screams had stopped too, and I saw her lying lifeless beside (her father)," she recounted. "They'd both been shot dead."
(With additional inputs from PTI, AP)