Specialist Federico Merida, found guilty of murder in the town of Ad-Dawr near Tikrit, was handed down one of the heaviest sentences to a US serviceman since the start of the US-led invasion of Iraq.
"Specialist Federico Merida pled guilty to murder and making false official statements during court martial proceedings at Forward Operation Base Danger, Tikrit, Iraq," the US military said in a statement on Saturday.
In addition to the sentence, Merida was demoted to private and was given a dishonourable discharge, the statement added.
US troops in Iraq have frequently faced accusations of abuses, including murder.
The worst scandal to confront US forces has been the torture and sexual humiliation of Iraqi inmates in the Abu Ghraib prison on the outskirts of Baghdad.
The scandal erupted and outraged the world when photographs of US prison guards abusing prisoners first surfaced last April.
While several US servicemen have since been charged, military investigators have recommended action against a large number of others.