Parliament green-lit the move after saying that Hamas is closely linked to terrorism, pledging 14 years of jail for those who support the group.
Britain has designated all of Hamas an "Islamist terrorist group", warning that its members and those who support the group could face stiff jail terms.
London said last week it was no longer possible to make a distinction, assessing that Hamas "commits, participates in, prepares for and promotes and encourages terrorism".
The Qassam Brigades, the military wing of the group that rules the Gaza Strip, has been banned in Britain since 2001 but the interior ministry extended the ban to its political entities.
"The Islamist terrorist group Hamas has today become a proscribed terrorist organisation in the UK in its entirety following parliament's approval," the Home Office said.
"This means that members of Hamas or those who invite support for the group could be jailed for up to 14 years."
Israel has welcomed the move, which follows similar action by the United States and the European Union.
But Hamas itself has called the UK move "a crime against our Palestinian people and all their history of struggle".
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(With input from news agency language)
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