The six-member Gulf Cooperation Council “decided to consider the militias (of Hezbollah) a terrorist organisation”, GCC Secretary General Abdullatif al-Zayani said in a statement.
The GCC targeted Hezbollah because of “hostile actions of the militia who recruit the young people (of the Gulf),” he said.
Zayani cited “their terrorist acts and incitement in Syria, Yemen and in Iraq”, which he said were threatening Arab security.
Gulf nations have taken a series of measures against Hezbollah since Saudi Arabia last month halted a $3 billion programme funding French military supplies to Beirut.
Hezbollah is backed by Saudi Arabia’s regional Shiite rival Iran, which supports opposing sides to Riyadh in conflicts in Syria and Yemen.
Announcing the military funding cut last month, a Saudi official said the kingdom had noticed “hostile Lebanese positions resulting from the stranglehold of Hezbollah on the state”.
He specifically cited Lebanon’s refusal to join the Arab League and the Organisation of Islamic Cooperation in condemning attacks on Saudi diplomatic missions in Iran in January.
Riyadh cut diplomatic ties with Tehran after demonstrators burned its embassy and a consulate following the Saudi execution of a prominent Shiite cleric.
The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Last week Saudi Arabia urged its nationals to leave Lebanon and avoid travelling there.
Qatar and Kuwait followed with similar travel advisories. But the United Arab Emirates went further, banning its nationals from travel to Lebanon and reducing diplomatic representation there.
Saudi Arabia last week extended sanctions on Hezbollah, freezing the assets and prohibiting dealings with three Lebanese nationals and four companies.
Gulf monarchies had already sanctioned Hezbollah in 2013, targeting residency permits and the movement’s financial and business activities in reprisal for its armed intervention in Syria.
Saudi Arabia and Qatar back rebels opposed to Syria’s government, and Riyadh says it is ready to send special forces to fight Islamic State jihadists in Syria if a US-led coalition decides on ground action.
Hezbollah chief Hassan Nasrallah on Tuesday called on Saudi Arabia not to collectively punish Lebanon’s people just because Riyadh disagreed with his group’s policies.
In a televised address, Nasrallah said Saudi Arabia does not have “the right to sanction the Lebanese people because one particular party took a certain position”.
Nasrallah pledged Hezbollah would continue to speak out against what it saw as Saudi aggression in the region.