US President Donald Trump has designated Iran's elite Revolutionary Guard Corps (IRGC) as a foreign terrorist organisation.
It is the first time the US has labelled another nation's military as a terrorist organisation.
The White House said the IRGC was Iran's primary means of "implementing its global terrorist campaign".
Washington-Tehran tensions have risen since Mr Trump withdrew the US from the international Iran nuclear pact, reports BBC.
The US has sanctioned parts of the IRGC before, including its elite Quds Force intelligence unit.
"This unprecedented step, led by the Department of State, recognises the reality that Iran is not only a State Sponsor of Terrorism, but that the IRGC actively participates in, finances, and promotes terrorism as a tool of statecraft," Mr Trump said in a statement on Monday.
The president added that the move was meant to "significantly expand the scope and scale" of pressure on Iran.
"If you are doing business with the IRGC, you will be bankrolling terrorism," Mr Trump said.
