The government order, approved on Friday, makes it a criminal offence to be a member or a supporter of the paramilitary group in the UK.
“The Russian mercenary organisation, Wagner Group, has been proscribed as a terrorist organisation today after an order was laid in Parliament on Wednesday September 6,” the Home Office said in a statement.
Apart from joining the group or showing support, arranging meetings for the group and displacing Wagner’s flag or logo will also be considered a criminal offence.
Those found guilty of violating the order will face a potential prison sentence of up to 14 years, which can be handed down alongside or in place of a fine, it added.
The move puts Wagner in the same category as the Islamic State group, the Palestinian militant group Hamas, Boko Haram in Africa and Northern Ireland paramilitaries among others.
The Wagner Group is a private military company that was under the control of Prigozhin until his reported death in a plane crash on 23 August.
Home secretary Suella Braverman proposing the ban last week said Wagner has been “involved in looting, torture and barbarous murders”.
Calling the group a “threat to national security”, Ms Braverman added:”They are terrorists, plain and simple – and this proscription order makes that clear in UK law.”
The ban will allow UK authorities to seize the organisation’s assets in a symbolic move as Wagner is not known to operate in Britain.
Wagner cut its teeth in deployments to Crimea – illegally annexed by Russia in 2014 – and eastern Ukraine’s Donbas region in the aftermath of that act and has since dispatched troops to several conflicts in the Middle East and Africa, including the Syrian Civil War.
The ban came into force following a recommendation by the parliament’s influential Foreign Affairs Committee in July that Wagner be outlawed. The committee said British authorities had “underplayed and underestimated” the threat posed by the mercenary group.
The committee said Wagner’s future was uncertain after Prigozhin’s short-lived armed mutiny against Russia’s top military leaders in June. The lawmakers said Britain should take advantage of the confused situation to “disrupt” Wagner.
Several other allies of Ukraine have sanctioned Wagner’s leaders, and earlier this year, the Lithuanian and Estonian legislatures passed resolutions declaring it a terrorist organisation. The US has designated the Wagner Group as a transnational criminal organisation.