The House of Representatives passed the Otto Warmbier North Korea Nuclear Sanctions Act to curb North Korea’s access to financial markets.
The bill was named after American student Otto Warmbier, who died in June after his release from custody in Pyongyang.
It was supported by 415 members of the House, with just two votes against.
As tensions escalate, Washington’s sanctions will put more economic pressure on Kim Jong-un to abandon his nuclear weapons programme.
Under the act, any foreign countries working with the rogue state will be banned from doing business with US companies.
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Republican Andy Barr said the new act would “impose the most far-reaching sanctions ever directed at North Korea”.
House Majority Leader Kevin McCarthy said: “Renaming this legislation the Otto Warmbier North Korea Nuclear Sanctions Act won’t bring him back.
“But it will remind the world that there is nothing to be gained and everything to lose by working with such an evil regime.”
The bill must now be passed by the Senate and signed by US President Donald Trump to become law.
The Warmbier family said it was “extremely grateful” to lawmakers for naming the act in honour of their late son.
Otto was arrested by North Korean police in 2016 after being charged with stealing a propaganda poster from a hotel.
He was later charged with “hostile acts” against the North and sentenced to 15 years of hard labour.
The 22-year-old fell into a coma earlier this year and died in June after being transported back to the US.
It comes as Beijing has vowed to enforce recent UN sanctions banning imports of coal and oil from Kim’s brutal regime.
China, North Korea’s sole major ally, accounts for more than 90 per cent of trade with the isolated country.
But China has stopped short of agreeing to US demands for a fuel embargo and has urged Washington to negotiate with Pyongyang.
Mr Trump, who is due to visit China next month, wants his counterpart Xi Jinping to do more to reign in North Korea.
Chinese officials see the US and South Korea as sharing responsibility for rising tensions in the region.
The allies have carried out several military drills near the Korean peninsula in preparation for a nuclear attack by North Korea.