After talks with Israeli Prime Minister Benjamin Netanyahu, Morales decided to instruct Guatemala's foreign ministry to move the embassy, the president said on his official Facebook account, the Guardian reported.
Guatemala was one of nine nations that voted with the United States and Israel on Thursday when the UN General Assembly, with 128 votes in its favour, adopted a non-binding resolution calling on Washington DC to withdraw its unilateral recognition of Jerusalem as the capital of Israel.
President Trump reversed decades of U.S. policy on December 6 when he recognised Jerusalem as Israel's capital.
Trump's Jerusalem move has prompted international criticism and sparked protests across the world.
Jerusalem is considered a sacred place, which is home to Jewish, Christian and Muslim holy sites.
However, it is also a disputed territory, contested by both Israel and Palestine, which sees it as a capital of its future state.