The Obama administration has declared the insurgent Haqqani network a terrorist body, a move that could undermine Afghan peace efforts and test fragile US-Pakistani relations.
Secretary of State Hillary Clinton said she notified Congress of her decision, which bans Americans from doing any business with members of the Pakistan-based militant group and blocks any assets it holds in the United States.
"We also continue our robust campaign of diplomatic, military, and intelligence pressure on the network, demonstrating the United States' resolve to degrade the organisation's ability to execute violent attacks," she said in a statement.
Enraged by a string of high-profile attacks on US and Nato troops, Congress gave Mrs Clinton a Sunday deadline to deliver a report on whether the Haqqanis should be designated and all of its members subjected to US financial sanctions.
Mrs Clinton's decision comes amid numerous disagreements within the administration about the wisdom of the designation.
The US already has placed sanctions on many Haqqani leaders and is targeting its members militarily. But it had held back from formally designating the al Qaida-linked network a terrorist group over concerns it could jeopardise reconciliation efforts between the government and insurgents in Afghanistan, and ruffle feathers with Pakistan, the Haqqanis' long-time benefactor.
Washington has long branded the group among the biggest threats to American and allied forces in Afghanistan, and to that country's stability after American troops leave in 2014. A subsidiary of the Taliban, it is based in northern Pakistan but crosses the border to launch attacks, including a rocket-propelled grenade assault on the US Embassy and Nato compound in Kabul in September.
The Obama administration has been trying to coax Afghanistan's fighting groups into peace talks, offering the prospect of a Qatar-based political office for insurgents and even the transfer of several prisoners being held at the US naval base at Guantanamo Bay, Cuba. Negotiations have been dormant for months, and the Haqqanis have been among the least interested in talking.
A senior Pakistani intelligence official said the administration's decision could hurt US-Pakistani relations and negatively impact the peace process with the Taliban.
The group also has enjoyed a close relationship with Pakistan. The US and its often reluctant counterterrorism ally have been at loggerheads over the Haqqanis for years, with Washington accusing Islamabad of giving the network a free hand in the remote North Waziristan region and even providing it with some logistical support.