The organisation, which has gone by several names including the European Australia movement, the National Socialist Network, and White Australia, has been listed as a prohibited hate group after the government received advice from spy agency ASIO.
It is the second group to be effectively outlawed in Australia under anti-hate legislation.
Supporting, joining or funding the group would become a criminal offence from Saturday, with a maximum of 15 years in prison, Home Affairs Minister Tony Burke said.
"None of this will stop bigoted people from having horrific ideologies, but it does prevent this group from organising, from meeting, and prevents some of the sorts of horrific bigoted rallies that we've seen around our country," Mr Burke told reporters in Canberra on Friday.
"It sends a clear message to people who believe in racial supremacy that their views have no place in Australia.
"We're a country that judges you on who you are, not on where you're from."
Mr Burke said he was first advised in April that White Australia would likely meet the threshold to be listed.
The group had "phoenixed" and changed its name to avoid scrutiny, but still had many of the same members and carried out the same activities, he said.
A specific violent spat in Melbourne, along with threats and a flurry of arrests, contributed to its ban, Mr Burke said.
The organisation was allegedly involved in an attack on a sacred First Nations site in Melbourne in August.
Its leader Thomas Sewell in March pleaded not guilty to five charges relating to the incident, including violent disorder, affray and unlawful assault.
Elsewhere, neo-Nazis organised by the group protested outside the NSW parliament in November.
The White Australia movement is the second organisation to run afoul of anti-hate laws passed following the Bondi terror attack, after Islamist collective Hizb ut-Tahrir was listed as a prohibited hate group in March.
The laws caused the disbandment of the National Socialist Network and its allied groups in January.
Mr Burke said he would not be surprised if there was a legal challenge, but remained confident of the government's position.
"It hasn't happened yet, it still might. But you have to, in this particular portfolio, work on the basis that it's always likely there'll be a legal challenge," he said.
Opposition home affairs spokesman Jonno Duniam welcomed the decision.
"Let's be absolutely clear, the modus operandi of these neo-Nazis is to destroy the Australian way of life," Senator Duniam said in a statement.
"Australians do not want to see people avoid justice simply by tearing down a banner and re-emerging under a different name."
Executive Council of Australian Jewry co-chief executive Peter Wertheim said the council had been calling for the measure since 2021.
"It doesn't matter what they call themselves, or how they structure themselves, these groups use all the well-known techniques of thuggery and menace that Nazis have always used against Jewish communities and other groups they have targeted," he said.
20°C