Embedded packaging for devices and systems comprising lateral GaN power transistors is disclosed. The packaging assembly is suitable for large area, high power GaN transistors and comprises an assembly of a GaN power transistor and package components comprising a three level interconnect structure. In preferred embodiments, the three level interconnect structure comprises an on-chip metal layer, a copper redistribution layer and package metal layers, in which there is a graduated or tapered contact area sizing through the three levels for dividing/applying current on-chip and combining/collecting current off-chip, with distributed contacts over the active area of the GaN power device. This embedded packaging assembly provides a low inductance, low resistance interconnect structure suitable for devices and systems comprising large area, high power GaN transistors for high voltage/high current applications.