Iran and Hezbollah are both sworn enemies of Israel and the Lebanese Shia has received Tehran's moral, financial and military support since its inception.
Iran "strongly denounces the EU decision and believes it is in line with the illegitimate interests of the Zionist regime," Foreign Minister Ali Akbar Salehi was quoted as saying by official media.
"The European Union, due to lack of correct judgement about the regional crisis, took this wrong decision," Salehi said.
The action, he added, is "against the Lebanese people since Hezbollah has put up a legitimate defence against the Zionists' aggression's," he added.
Hezbollah fought a bitter war with Israel in 2006 and more recently has been providing military support to the regime of Syrian President Bashar al Assad as it tries to put down an insurgency that has escalated into civil war.
Salehi's comments come after the EU on Monday put Hezbollah's military wing on its of terrorist organizations, a move the Lebanese Shia movement slammed as aggressive and unjust.
To get the required agreement of all 28 EU member states, ministers had to overcome reservations in some members that the move would further destabilize Lebanon, where the militant group plays a key role in politics and has dominated the government since 2011.
Accordingly, EU political and economic ties with Lebanon will be fully maintained in a delicate balancing act.
Hezbollah's military wing was blamed for a deadly attack on Israeli tourists in Bulgaria last year.
In March, a Hezbollah operative was also convicted in Cyprus of plotting a similar attack.
Iran and Hezbollah have remained steadfast allies of Assad's regime throughout the conflict roiling Syria.
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@Saad: Do u have proof or any evidence that they are torturing people in syria... you are just another pro al qaeda and proud of what they are doing with innocent syrians
Then get them to stop killing and torturing people in Syria
Iranian statements implying that anyone considering Hezbollah terrorist are pro Israeli are ridiculous. The reality is that Hezbollah is no longer in favor by most Sunni dominated nations and some (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates and Egypt) have gone so far as labeling them terrorist.
Most of the Western countries are one confederation under instruction from Israel. There does not apear to be any way out of it so unfortunately the world will have to get used to it.