In a statement on Monday, the Iranian top security council said the designation came as a "reciprocal measure" against US President Donald Trump's "illegal and unwise" move to blacklist Iran's Islamic Revolution Guard Corps (IRGC) as a foreign terrorist organization.
Trump said in a statement earlier in the day that the Iranian elite forces' designation "makes crystal clear the risks of conducting business with, or providing support to, the IRGC. If you are doing business with the IRGC, you will be bankrolling terrorism."
Following Trump's statement, US Secretary of State Mike Pompeo warned all banks and business of the consequences of dealing with the IRGC, saying, “Businesses and banks around the world now have a clear duty to ensure that companies with which they conduct financial transactions are not conducted with the IRGC in any material way."
He added that designation of Iran's revolutionary guard corps as terrorist group to take effect in one week.
The SNSC strongly condemned the "illegal and dangerous" move by the US regime against the IRGC and said, "The Islamic Republic of Iran regards this baseless move as a major threat to regional and international peace and security and a blatant violation of the compelling rules of international law and the United Nations Charter."
It added that CENTCOM has been tasked with implementing terrorist policies of the US government against countries in West Asia, noting that CENTCOM's effort to impose those policies has endangered Iran's national security and the lives of both Iranians and non-Iranians, including through participation of the US in the massacre of the Yemeni people and other civilians in the West Asia region.
Iran's SNSC also warned that the US regime "will be responsible for dangerous consequences" of this adventurist measure."
Earlier on the day, Foreign Minister Mohammad Javad Zarif proposed in a letter to Iran’s President Hassan Rouhani and the head of the Supreme National Security Council to designate US Armed Forces in West Asia as terrorists.
Given the overt and covert support of US military forces for terrorist groups and their direct involvement in terrorist activities in the region, Zarif proposed blacklisting US military forces in the West Asia region as terrorists, IRNA reported.
The designation decision, formally under the State Department's purview, was made as part of the White House's increasingly aggressive strategy towards Iran.
Iran had warned it will take reciprocal action against Washington for its move against the IRGC.
The chief commander of the IRGC warned on Sunday that the elite force will put reciprocal action against the US forces on its agenda if Washington labels it as a “terrorist organization.”
"If the Americans make such a silly move and endanger our national security, we will implement and put reciprocal measures on our agenda based on the policies of Iran's Islamic establishment," Major General Mohammad Ali Jafari said.
It is the first time the United States has formally labeled another country’s military a terrorist group.
The US had already blacklisted dozens of entities and individuals affiliated with the IRGC, but not the entire force.