“Political associations are prohibited from having any form of contact with the Hezbollah,” Justice Minister Sheikh Khaled bin Ali Al Khalifa said in a ministerial decree.
A second clause in the decree says the Iran and Syria-backed group is a “terrorist organisation.”
The decision appears aimed at opposition groups, mostly Shias, who dominated anti-regime protests in February 2011 before a crackdown a month later.
Foreign Minister Sheikh Khaled bin Ahmed Al Khalifa on Sunday branded Hezbollah chief Hassan Nasrallah as a “terrorist”, in remarks a day after Nasrallah vowed to keep up the fight alongside regime forces in Syria to defeat the rebels.
“Terrorist Nasrallah has declared war on his nation,” Sheikh Khaled wrote on his Twitter account.
“Stopping him and rescuing Lebanon from his grip is a national and religious duty for all of us,” he said, as Hezbollah’s involvement in the Syria conflict deepened.
Last month Bahrain decided to list Hezbollah as a “terrorist organisation”, following a recommendation by parliament boycotted by the opposition.
Nasrallah is a popular figure among the Shias of the kingdom.
But the opposition in the kingdom which has been battling for democracy, insists its political agenda is Bahraini, and not linked to Iran, or other Shia sides.
Despite the 2011 crackdown on protests, Shias continue to demonstrate in villages, triggering frequent clashes with police.
Eighty people have been killed since protests erupted, according to the International Federation for Human Rights.
