The move means police can now charge people who materially or financially support the Islamic Revolutionary Guard Corps (IRGC) and requires banks to freeze any assets linked to the organisation.
The US designated the guards, part of the Iranian military, as a terrorist group in 2019.
Britain, however, has resisted a parallel move. The foreign secretary, David Cameron, has said there is no demand for the move from the UK security services and it would almost inevitably lead to Iran cutting off all diplomatic ties with Britain.
Labour, which is ahead in polling for the UK's 4 July election, has said it would proscribe the IRGC, a move that had strong cross-party support in the previous parliament, but the proposal was not included in its recent manifesto, which may indicate that the party is aware there are competing views in the intelligence services.
Lord Cameron has said he would prefer to deal with Iranian leaders directly and not through third parties as the US is required to do by using the Swiss embassy in Tehran as its conduit.
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