Karadzic orchestrated the 1995 Srebrenica massacre, in which Bosnian Serb soldiers killed nearly 8000 Muslim men and boys in what was supposed to be a "safe area" protected by Dutch peacekeeping forces. It was the worst atrocity in Europe since the end of World War II.
Karadzic, now 73, was also responsible for the three-year siege of Sarajevo, in which an estimated 10,000 civilians died.
He barely reacted as the sentence was read out, but survivors of the war erupted into applause and hugged each other.
Serge Brammertz, the prosecutor who worked for a decade to convict Karadzic, welcomed the ruling.
He said it should prove even to Karadzic's diehard supporters in Bosnia that he is no hero.
"This trial has proven the opposite," he said. "Karadzic will be remembered by history as a war criminal responsible for horrific human suffering."
Karadzic's wartime military commander, General Ratko Mladic, is also awaiting an appeal judgment of his genocide and war crimes conviction, which earned him a life sentence.
After the war, Karadzic remained at large for years, his whereabouts a mystery to international authorities.
He was eventually discovered, disguised as a new-age therapist, and arrested in 2008.
The fact that he will spend the rest of his life in jail is cold comfort for many survivors and the relatives of victims.
"Considering what he's done, even if he had a thousand lives, and each one of those thousand lives was taken away from him, it would be not enough for the victims," said Munira Subasic of the Mothers of Srebrenica group. "How can I be happy? My son was killed by Mladic."
Mira Dogas, from the same association, said: "I cried because I lost my children, I am all alone. I am very shaken. I lost three sons; my husband, my grandchild, my father died.
"(Karadzic) is still alive while our children have been in the ground for a long time and they had a horrible death."
Jeremy Hunt, the Foreign Secretary, said: "This judgment…sends a powerful message that those who carry out atrocities will be held accountable for their actions and will be sentenced accordingly."