An ambassador is a high ranking diplomat who represents a nation and is usually accredited to a government or international organisation. Sometimes, regular individuals who are well respected are appointed to be an ambassador at large and are expected to live up to specific responsibilities on behalf of their country.
In general day to day use,it usually refers to a government representative who is stationed in a foreign land, ie in an embassy. These representatives, their vehicles and property are generally given diplomatic immunity in the host country.
The top diplomatic officers in the Commonwealth of nations are known as High commissioners, rather than Ambassadors.