The United States designated Iran's Revolutionary Guard Corps (IRGC) a foreign terrorist organization (FTO), President Donald Trump said on April 8.
Washington will continue to increase financial pressure and raise the costs on Iran "for its support of terrorist activity," Trump said in a statement.
The United States has already blacklisted tens of entities and people for affiliations with the IRGC, but not the organization as a whole.
"This designation will be the first time that the United States has ever named a part of another government as an FTO," Trump said.
"It underscores the fact that Iran’s actions are fundamentally different from those of other governments."
Critics have warned that such a step could open U.S. military and intelligence officials to similar actions by unfriendly countries.
On April 7, Iranian officials had reacted angrily after Trump's intention was first reported by U.S. media.
IRGC commander Mohammad Ali Jafari said the U.S. military will lose the security it enjoys in the region if Washington carries through with the designation.
"With this stupidity, the American army and security forces will no longer have today's calm in the west Asia region," Jafari was quoted as saying by the IRGC-affiliated Fars news agency.
Earlier, Iranian deputies said they will take reciprocal action against the United States.
"We will answer any action taken against [the IRGC] with a reciprocal action," said a statement signed by 255 of the 290 Iranian parliamentarians, the state news agency IRNA reported on April 7.