Warmbier, 21, was arrested for trying to steal a propaganda sign from a hotel while visiting North Korea in January.
He later appeared on state TV apparently confessing and saying a church group had asked him to bring back a "trophy" from his trip.
North Korea sometimes uses the detention of foreigners as a means of exerting pressure on its adversaries.
The BBC's Stephen Evans in South Korea says the 15-year sentence is high compared to those given to foreigners in the past.
This could be due to the particularly high tensions at the moment between North Korea and the US, he says.
North Korean state news agency KCNA said Warmbier was convicted under an article of the criminal code relating to subversion. The verdict was handed down by the Supreme Court.
Warmbier, a student at the University of Virginia, was arrested on 2 January as he was trying to leave North Korea. He was accused of committing "hostile acts".
KCNA said at the time he had gone to North Korea "to destroy the country's unity" and that he had been "manipulated" by the US government.
At the end of February, at a tearful press conference in Pyongyang, he said he had "committed the crime of taking down a political slogan from the staff holding area of the Yanggakdo International Hotel".
"The aim of my task was to harm the motivation and work ethic of the Korean people. This was a very foolish aim," he was quoted as saying.
He said it was the "worst mistake" of his life.
North Korea detainees often recant their confessions once out of the country.
US tourism to North Korea is legal but the US State Department strongly advises against it.
The sentencing comes a day after veteran US diplomat Bill Richardson met North Korean officials at the UN in New York to try to push for Warmbier's release.
Mr Richardson has previously been involved in negotiations to secure the release of Americans from North Korea detention.
Human Rights Watch (HRW) condemned the sentence: "North Korea's sentencing of Otto Warmbier to 15 years hard labour for a college-style prank is outrageous and shocking" said Phil Robertson, deputy director of HRW's Asia division, in a statement.
North Korean state media took a less lenient view: "The accused confessed to the serious offense he had committed against the DPRK, pursuant to the US government's hostile policy toward it, in a bid to impair the unity of its people, after entering as a tourist," reported the KCNA news agency.
The Democratic People's Republic of Korea (DPRK) is North Korea's formal name.