The German national of Moroccan descent was captured by Iraqi forces during the battle for Mosul last year.
Officials declined to identify the woman, who is the first foreign female to be sentenced to death in Iraq for joining the militant group.
It also is the first death sentence pronounced against a European woman and indicates the hard line Iraqis will pursue against westerners who went to the Middle East to fight for the terror group.
A court in Baghdad sentenced the woman to death by hanging for “providing logistical support and helping the terrorist group to carry out crimes,” said court spokesman Abdel Settar Bayraqdar.
She was convicted of participating in attacks on Iraqi security forces and offering the militant group logistical support, Birqdar said.
He added: ”The accused admitted during interrogations that she left Germany for Syria then Iraq to join ISIS with her two daughters, who married members of the terrorist organisation.”
The verdict can be appealed.
A German foreign ministry spokeswoman declined to comment.
Thousands of foreigners have been fighting for Islamic State in Iraq and Syria.
In September 2017, the same court sentenced to death a Russian man captured in Mosul who was found guilty of fighting for Isis.
Iraqi forces expelled the jihadists from Mosul in July 2017, ending three years of Isis rule in the city.
The same month Linda Wenzel, 17, who joined Isis the year before after fleeing her hometown in eastern Germany, was captured.
She is still in captivity in Iraq, possibly awaiting the same fate for her role in enforcing strict Sharia law against women in the territory seized by IS.
Iraq declared victory last month over Islamic State, which had seized control of nearly a third of the country in 2014.
However, IS continues to carry out bombings and other attacks in the country.
(Additional reporting by Allan Hall)