This is a limit imposed by the operating system; Microsoft does not allow a path plus file name to be longer than 254 characters.
The initial download of the package will be stored in one of the following locations, which is part of the path name:
The only way to work around this issue is to use an alternate location for the package, in combination with shortening the initial path of the folder structure, e.g. delivering the files in one compressed folder, instead of as a final file structure. When the package is executed, there should be an extra step to uncompress the structure used for delivery.
By using an alternate location to run the package from, you can at least eliminate (approx. 95 characters) this piece of the path when the package is executed. If this is done and the path name length is still longer than the 254 characters, then the package will have to be delivered in some other method. This problem frequently occurs with the DS Library replication where many packages are part of this package.