The United States on Monday designated Iran's Revolutionary Guard a "foreign terrorist organization" in a move to increase pressure on the country that could also have significant military, diplomatic and economic implications throughout the Middle East and beyond.

It is the first time that the U.S. has designated a part of another government as a terrorist organization. The designation sparked retaliation from Iran, whose Supreme National Security Council designated the United States Central Command and all its forces as terrorist, and could potentially open hundreds of foreign companies and business executives to U.S. travel bans and possible prosecution.

"This unprecedented step, led by the Department of State, recognizes the reality that Iran is not only a state sponsor of terrorism, but that the IRGC actively participates in, finances and promotes terrorism as a tool of statecraft," President Donald Trump said.

Secretary of State Mike Pompeo said the move is part of an effort to put "maximum pressure" on Iran to end its support for terrorist plots and militant activity that destabilizes the Middle East.

The designation blocks any assets that IRGC entities may have in U.S. jurisdictions and bars Americans from any transactions with it. When it takes effect next week, it will allow the U.S. to deny entry to people found to have provided the Guard with "material support" or prosecute them for sanctions violations. Those could include European and Asian companies and businesspeople who deal with the Guard's many affiliates.

"It makes crystal clear the risks of conducting business with, or providing support to, the IRGC," Trump said. "If you are doing business with the IRGC, you will be bankrolling terrorism."

Pompeo said the action should serve as a warning to corporate lawyers to ensure any business their companies do in Iran is not with any entity affiliated with the Guard.

The IRGC is a paramilitary organization formed in the wake of Iran's 1979 Islamic Revolution to defend the government. The force answers only to Iran's supreme leader, operates independently of the regular military and has vast economic interests across the country. The U.S. estimates it may control or have a significant influence over up to 50% of the Iranian economy, including non-military sectors like banking and shipping.

The State Department currently designates more than 60 organizations, including as al-Qaida and the Islamic State, Hezbollah and numerous militant Palestinian factions, as "foreign terrorist organizations." But none of them is a state-run military.

Iran had threatened to retaliate for the decision, and shortly after it was announced foreign Minister Mohammad Javad Zarif called on President Hassan Rouhani to include Mideast-based U.S. forces on Iran's own terrorist list, the official IRNA news agency reported. Zarif also sent a protest note over the U.S. designation to the Swiss Embassy in Tehran, which looks after the U.S. interests in Iran.

When the Supreme National Security Council's moved to designate the U.S. Central Command, also known as CENTCOM, as terrorist, it also labeled the U.S. as a "supporter of terrorism," according to the semi-official Fars news agency.

In addition to potential retaliation, the designation may also complicate U.S. diplomacy in the Middle East. No waivers or exceptions to the sanctions were announced, meaning U.S. troops and diplomats could be barred from contact with Iraqi or Lebanese authorities who interact with Guard officials or surrogates.

The Pentagon and U.S. intelligence agencies had raised concerns about the impact of the designation if the move did not allow contact with foreign officials who may have met with or communicated with Guard personnel. Those concerns have in part dissuaded previous administrations from taking the step, which has been considered for more than a decade.

The U.S. special envoy for Iran, Brian Hook, and the State Department's counterterrorism coordinator, Nathan Sales, said the decision was reached after consultation with agencies throughout the government but would not say in a news conference if the military or intelligence concerns had been addressed.

"Doing this will not impede our diplomacy," Hook said.