The move, which comes into effect on Friday, criminalises anyone who is either a member or supports the group, which is headed by Hassan Nasrallah.
Those who are associated with Hezbollah face up to 10 years in prison.
“Hezbollah is continuing in its attempts to destabilise the fragile situation in the Middle East – and we are no longer able to distinguish between their already banned military wing and the political party,” Home Secretary Sajid Javid said.
“Because of this, I have taken the decision to proscribe the group in its entirety.”
Hezbollah’s military wing was banned in the UK in 2008, but the latest announcement would also place its political members – many of whom are a part of the Lebanese parliament – in the same category.
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The UK’s decision will make waving Hezbollah flags illegal in demonstrations in central London on the occasion of al-Quds Day, Iran’s annual Palestinian solidarity day, which falls on the last Friday of Ramadan.
Hezbollah is already considered a “terrorist” organisation by the United Sates, Canada, Israel, as well as the Gulf Cooperation Council and Arab League.
Last month, Lebanese politicians finally agreed to a new government, which include three Hezbollah ministers, ending an impasse that lasted eight months since the country held general elections in May 2018.
Al Jazeera and news agencies