The European Union's 28 foreign ministers voted to blacklist the terrorist group during a meeting in Brussels.
"It is good that the EU has decided to call Hezbollah what it is: a terrorist organization," Dutch Foreign Minister Frans Timmermans said in a statement shortly after the decision was reached in Brussels.
"The EU's decision sends a strong message to Hezbollah that it cannot operate with impunity," said White House press secretary Jay Carney. "This designation will have a significant impact on Hezbollah's ability to operate freely in Europe by enabling European law enforcement agencies to crack down on Hezbollah's fundraising, logistical activity, and terrorist plotting on European soil."
U.S. Secretary John Kerry and congressional representatives also hailed the unanimous decision.
Senate Foreign Relations Committee Chairman Bob Menendez, D-N.J., said the bloc "deserves praise" for its decision, even if it isn't targeting the entire group, The Hill reported.
"While I believe that the entire Hezbollah organization unabashedly qualifies for a place on the European Union list of terrorist organizations, today's decision will send a clear message to Hezbollah, and to their primary backer Iran, that Europe is not a safe haven for terrorists," Menendez said. "Hezbollah's military actions in Syria have further cemented Hezbollah's terrorist affiliation and I welcome the unity of purpose with which the U.S. and the EU are approaching this issue."
Timmermans said the designation effectively will limit Hezbollah's "capacity to act," The New York Times reported. Sanctions were expected to include travel bans and asset freezes.
Britain pressed for the listing following a 2012 terrorist attack in Bulgaria in which five Israeli tourists and their Bulgarian driver were killed, and a March conviction of a Hezbollah operative in Cyprus for plotting a similar attack.
Support for sanctioning Hezbollah has risen in recent months because of the organization's support for Syrian President Bashar Assad in his campaign against a two-year uprising.
"As Hezbollah has deepened its support for the brutal Assad regime and worked to expand its global reach through increased involvement in international criminal schemes and terrorist plots around the world," Kerry said, "a growing number of governments are recognizing Hezbollah as the dangerous and destabilizing terrorist organization that it is."