A federal court judge issued an order for North Korea to pay the parents of Otto Warmbier more than $500 million ($740m), holding the country liable for the death of their son.

In a strongly-worded opinion, Chief Judge Beryl Howell of the US District Court for the District of Columbia said the large award was necessary to punish and deter North Korea.

"North Korea is liable for the torture, hostage taking, and extrajudicial killing of Otto Warmbier, and the injuries to his mother and father, Fred and Cindy Warmbier," Howell wrote.

"Before Otto travelled with a tour group on a five-day trip to North Korea, he was a healthy, athletic student of economics and business in his junior year at the University of Virginia, with 'big dreams' and both the smarts and people skills to make him his high school class salutatorian, homecoming king, and prom king," Howell wrote.

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"He was blind, deaf, and brain dead when North Korea turned him over to US government officials for his final trip home."

Fred and Cindy Warmbier and the estate of their oldest son had sought more than US$1 billion in damages from the Democratic People's Republic of Korea, with their lawyers from McGuireWoods arguing the massive financial penalty would send a strong message to the country that it cannot take US citizens hostage.

The Trump Administration placed North Korea on the list of state sponsors of terrorism in November 2017, making the extraordinary lawsuit possible.

- AP

Cindy and Fred Warmbier, parents of Otto Warmbier, wait for a meeting at the United Nations headquarters in May. Photo / AP file
Cindy and Fred Warmbier, parents of Otto Warmbier, wait for a meeting at the United Nations headquarters in May. Photo / AP file