In notices published in The Federal Register on Friday, the State Department said it had removed the groups after a mandatory five-year review of their designations.
Al Qaeda, which was also up for review, was kept on the list, first created under the federal Immigration and Nationality Act.
The designation allows the US to take strong, unilateral moves against a group's members and associates, seizing assets, blocking travel to the US, deportation and — significantly — jailing for up to 20 years anyone found providing “material support” for them.
Several of the removed groups once posed significant global threats, killing hundreds if not thousands of people across Asia, Europe and the Middle East.
The decision was politically sensitive for President Joe Biden's administration and the countries in which the organisations operated.
The groups removed from the list are the Basque separatist group ETA, the Japanese cult Aum Shinrikyo, the radical Jewish group Kahane Kach and two Islamist groups that have been active in Israel, the Palestinian territories and Egypt.
None of the five are seen as currently active organisations and the State Department must review the designations every five years to see if they remain warranted.
“Our review of these five [foreign terrorist organisation] designations determined that, as defined by the [Immigration and Nationality Act], the five organisations are no longer engaged in terrorism or terrorist activity and do not retain the capability and intent to do so,” the department said in a statement.
The revocations also “recognise the success Egypt, Israel, Japan and Spain have had in defusing the threat of terrorism by these groups”, it said.
All but one of the five groups were first designated foreign terrorist organisations in 1997 and have remained on the list for the past 25 years.
Agencies contributed to this report