Australia labels Hezbollah a 'terrorist' group in its entirety
The move extends proscription of the Shia group to the entire organisation, whereas it previously only applied to the armed wing, and brings the country in line with the United Kingdom and the United States.
Home Affairs Minister Karen Andrews said that the Tehran-backed group "continues to threaten terrorist attacks and provide support to terrorist organisations" and poses a "real" and "credible" threat to Australia.
Hezbollah is part political party and part armed group, the only one in Lebanon to have refused to disarm since the civil war ended in 1990.
The movement, which plays a pivotal role in Lebanese politics, has been accused of fuelling Syria's civil war by sending thousands of fighters across the border to fight armed factions opposed to President Bashar al-Assad's government.
In 2006 it fought a 34-day war against Israel, leading to over 1,000 casualties in Lebanon and over 150 in Israel.
Some countries have sought to distinguish between Hezbollah's political and armed factions, fearing a blanket ban could further destabilise Lebanon and hamper contacts with authorities. Australia had followed such a policy since 2003, when it banned Hezbollah's so-called External Security Organisation - a part of the movement's military wing that focuses chiefly on shadowy overseas operations.
But as of this week, membership of the entire organisation, or providing funding for it, is now proscribed in Australia, which has a large Lebanese community.
Israel thanks 'friend'
Israeli Prime Minister Naftali Bennett thanked his "friend" and Australian counterpart Scott Morrison for the move.
"Hezbollah is an Iranian-backed terror organisation in Lebanon responsible for countless attacks in Israel & around the world," he tweeted.
No reason was given for the timing of Canberra's decision, which comes as Lebanon reels from spiralling political and economic crises.
Nearly 80 percent of the population is estimated to be living below the poverty line.
Elections are expected in March 2022 and there is growing public anger about nepotism and corruption among Lebanon's ruling class.
The move may play well domestically for Australia's conservative government, ahead of its own elections expected next year.
Before the 2018 polls, Morrison made the surprise move of recognising West Jerusalem as Israel's capital.
The Australian government also announced on Wednesday that it would be listing neo-Nazi organisation The Base as a terror group. The Base shares the same name in English as al-Qaeda, a choice which some analysts believe was intentional.
"They are a violent, racist neo-Nazi group, known by security agencies to be planning and preparing terrorist attacks," Andrews said.