Check the wordwrap() function.

>>>>templates/test.tpl
<?xml version="1.0" ?>
<opt:root>
{@text is 'This is a veeeeeeeeeeeeeeeeeeeeeery long text that needs to be truncated'}
{u:wordWrap(@text, 17, '&lt;br /&gt;', true)}
</opt:root>

>>>>expected.txt
OUTPUT

>>>>result.txt
This is a<br />
veeeeeeeeeeeeeeee<br />
eeeeeery long<br />
text that needs<br />
to be truncated