Britain, France and Germany are signatories to a 2015 deal known as the Joint Comprehensive Plan of Action (JCPOA) intended to stop Tehran from obtaining nuclear weapons.
The trio allege that Iran has broken its promises under the treaty.
"We urge (Iran) to act now," said British ambassador Barbara Woodward, casting a vote against a resolution that would have allowed extending a suspension of the sanctions.
She left the door open for diplomacy at the UN general assembly next week, when heads of state and government will gather in New York.
But Amir Saeid Iravani, Iran's envoy to the UN, told the UN Security Council described the vote as the "politics of coercion."
"Today's action is hasty, unnecessary and unlawful. Iran recognizes no obligation to implement it," he said.
Iranian Foreign Minister Abbas Araghchi said earlier Friday he had put forward a "fair and balanced" proposal to European powers to prevent the return of sanctions.
Ahead of the vote, French President Emmanuel Macron said in an Israeli television interview that he expected international sanctions to be reinstated by the end of the month. But the French ambassador to the UN said Friday that the option of a negotiated settlement was still on the table.
In a letter to the UN in mid-August, the "European Three" slammed Iran as having breached several commitments under the JCPOA, including building up a uranium stock to more than 40 times the level permitted under the deal.
Despite a flurry of diplomatic talks between the European powers and Tehran, the Western trio insisted there was no progress.
"The Council still has time to greenlight a further resolution extending the suspension of sanctions -- if Iran and the Europeans reach a last-minute bargain," Gowan said.
Iran's arch-foe Israel welcomed the move by the Security Council, which was opposed by Algeria, China, Pakistan and Russia.
"The international community's goal must remain unchanged: to prevent Iran from ever acquiring nuclear capabilities," Israeli Foreign Minister Gideon Saar posted on X.
- 2015 deal in tatters -
Western powers and Israel have long accused Tehran of seeking to acquire nuclear weapons, a claim Iran denies.
The hard-won 2015 deal has been left in tatters since the United States walked away from it in 2018, during Donald Trump's first presidency, and reimposed sanctions on Iran.
Following the US withdrawal, Tehran gradually broke away from its commitments under the agreement and began stepping up its nuclear activities, with tensions high since the 12-day war between Iran and Israel in June.
The war also derailed Tehran's nuclear negotiations with the United States and prompted Iran to suspend cooperation with the International Atomic Energy Agency (IAEA). Inspectors from the Vienna-based UN body left the Middle Eastern country shortly after.
Iran late Thursday withdrew a draft resolution at the IAEA that called to ban attacks against nuclear facilities after its war with Israel, citing US pressure.
In mid-June, Israel launched an unprecedented bombing campaign against Iran, starting the war that saw Israeli and also US strikes on key Iranian nuclear facilities.
During his previous term, Trump attempted to trigger the JCPOA's so-called "snapback clause" to reimpose sanctions on Iran in 2020, but failed due to his country's unilateral withdrawal from the deal two years earlier.
While European powers have for years launched repeated efforts to revive the 2015 deal through negotiations and said they have "unambiguous legal grounds" to trigger the clause, Iran does not share their view.
Iran has threatened to withdraw from the Nuclear Non-Proliferation Treaty (NPT) if the snapback is triggered.
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