The German government announced on Thursday it had banned the neo-Nazi group Combat 18.
The organisation, which was founded in Britain, was implicated in the murder of a German municipal official last year.
"Far-right extremism and anti-Semitism do not have a place in our society," an interior ministry spokesman said on Twitter as justification for the ban on the group's German branch.
Raids are presently being conducting against its members in six states.
German authorities have long kept a close eye on the group, which although believed to have only about 20 members, are considered to be willing to commit violent acts.
The neo-Nazi sympathiser suspected of having killed a politician Walter Lübcke, 65, for his pro-migrant positions was found to have had contacts with Combat 18.
Stephan Ernst, a 45-year-old German man with a string of convictions for violent anti-migrant crime, was arrested two weeks after the murder in June.
The German interior minister, Horst Seehofer, said Ernst had confessed to a “political murder” citing Mr Lübcke’s pro-refugee stance was his motive.
Mr Lübcke had been a supporter of Chancellor Angela Merkel’s pro-refugee policy and had previously received death threats.
Combat 18 was founded in Britain in 1992 and the number in its name stands for the first and eight letters of the alphabet - the initials of Adolf Hitler.
The group's motto includes the phrase: "Whatever it takes".
The ban of the group comes amid a resurgence of racist and anti-Semitic attacks that has prompted questions over how the German state combats right-wing extremism.
In October, two people were killed in an attempted anti-Semitic attack on a synagogue in the town of Halle in Eastern Germany.
Several high-profile German politicians have also reported receiving death threats from far-right groups in recent months.