The department described Boko Haram as a militant group with ties to al-Qaida in the Islamic Maghreb, a North African branch of al-Qaida. The designation includes militant group Ansaru, which the department said was a splinter faction of Boko Haram.
"These designations are an important and appropriate step ... to help root out violent extremism while also addressing the legitimate concerns of the people of northern Nigeria," the department said in a statement.
U.S. Rep. Ed Royce, R-Calif., chairman of the House Foreign Affairs Committee, said listing militant group Boko Haram as a terrorist organization would help address the security needs of Nigeria.
"The United States has a security interest in seeing a stable Nigeria," he said in a statement Tuesday, ahead of the formal announcement.
The United Nations estimates at least 30 people were killed when their wedding convoy was attacked allegedly by members of Boko Haram in northern Borno state in early November.
Cecile Pouilly, a spokeswoman for the U.N. High Commissioner for Human Rights, said the "atrocious attack" was inexcusable. The State Department said Boko Haram's campaign in Nigeria was "ongoing and brutal."
The Nigerian government imposed a summer curfew over parts of northern Nigeria in response to the group's campaign.
Royce referred to the group as the Nigerian Taliban, a reference to the conservative Islamic group tied to the Afghan insurgency.