The US welcomed Australia's intention to list Hezbollah in its entirety as a terrorist organisation, a spokesman for the US State Department said on Friday.
Discarding the distinction between the group's terrorist wing and the rest of the organisation is a “critical step forward”, Ned Price said in a statement.
Designating all Hezbollah entities as terrorist organisations would make being a member of or supporting those entities a criminal offence.
Australia had previously recognised Hezbollah's “political” wing while sanctioning its “military” wing.
The remaining 25 terrorist organisations on Australia’s list are extremist groups that include Hezbollah’s External Security Organisation, which was designated under Australia’s Criminal Code in 2003.
Mr Price said the group's “robust paramilitary and terrorist capabilities are impediments to peace and stability in Lebanon and in the Middle East".
“Hezbollah is a dangerous terrorist organisation that threatens the safety of the international community and undermines the sovereignty of the Lebanese state,” Mr Price said.
In announcing its decision this week, Canberra said Hezbollah continues “to threaten terrorist attacks and provide support to terrorist organisations”, and added that the group represents a tangible threat to Australia.
Canberra's decision is an important step in stunting Hezbollah's efforts to operate in the country, Mr Price said.
The US, UK, Germany, Israel and most of the Arab League all recognise Hezbollah as a terrorist organisation. Other countries have been reticent to sanction the group, fearing that to do so would destabilise Lebanon.
Israeli Prime Minister Naftali Bennett thanked his Australian counterpart Scott Morrison for the decision.
“Hezbollah is an Iranian-backed terror organisation in Lebanon responsible for countless attacks in Israel and around the world,” Mr Bennett tweeted.
Israel's Foreign Minister Yair Lapid added: “I call on additional countries and the European Union to join this pressure on Hezbollah, to outlaw its activities and to recognise the entirety of the organisation as a terrorist organisation.”
Hezbollah condemned the move by Australia as a “servile submission to American and Zionist dictations”.
The Associated Press contributed to this report