Israel officially banned the Islamic State and anyone associating with it, in a declaration signed on Wednesday by Defense Minister Moshe Ya'alon.
The decree outlawed meetings of any kind between Islamic State members and called it an illegal organization.
At the same time, Ya'alon also signed a similar declaration that outlaws the Abdullah al-Azzam Brigades, a Sunni jihadist group linked to al-Qaida which has in the past claimed responsibility for launching rockets into Israel.
By officially declaring the Islamic State illegal, Israel will now be able to take legal action against anyone raising funds or associating with the terror organization in any way.
"This is being done for the sake of national security, public safety and public order," the declaration states.
The declaration bans the Islamic State's various names in any form and goes on to list several of its Arabic, Hebrew and English titles.
The decision came just a day after the terror organization beheaded an American Journalist, Steven Sotloff, who also held Israeli citizenship.