The US is set to re-designate Yemen's Houthi rebels as "global terrorists", senior Biden administration officials have said.
Secretary of State Antony Blinken will approve the move amid ongoing attacks on commercial shipping in the Red Sea by the Iran-backed group.
The move will require US financial institutions to freeze Houthi funds and its members will be banned from the US.
It reverses Mr Blinken's 2021 decision to remove the Houthis from the list.
In the waning days of the Trump administration officials imposed the specially designated global terrorist (SDGT) and foreign terrorist organization (FTO) labels on the Houthis.
This action was taken despite warnings from the UN and aid groups that it could push war-torn Yemen into a large-scale famine.
But in 2021, shortly after the inauguration of President Joe Biden, that decision was reversed by the newly installed Secretary Blinken, who cited the dire humanitarian situation.
Speaking to reporters ahead of Wednesday's announcement, senior administration officials defended the decision to reinstate the SDGT designation but not the FTO designation, which they said had been taken to ensure the continued flow of aid into Yemen.
"It was the correct step to revoke," one official said, arguing that it was a move taken in "recognition of a very dire humanitarian situation" in the country and to ensure that "US policies weren't impeding" civilians' access to urgent aid.
But they accepted that the Houthis' campaign of attacks on commercial shipping, which has now seen dozens of missiles fired at vessels in the Red Sea, has become "unacceptable".
The new SDGT designation, which will come into force in 30 days, will also bar people and companies in the US from offering any support to the Houthis.
However, officials were keen to emphasise that a range of exemptions will be worked into the new designation to ensure humanitarian aid continues to flow into Yemen, a country devastated by almost a decade of civil war.
"We recognise the grave humanitarian situation in Yemen and we are taking steps to ensure these sanctions cause the least harm to the Yemeni people," one official said, adding that "unprecedented carve outs and licences" were being worked into the designation.
The Houthis began attacking merchant vessels in November, saying they were responding to Israel's military operation in Gaza. Since then, the group has launched dozens of attacks on commercial tankers passing through the Red Sea, one of the world's busiest shipping lanes.
In response, the US and UK launched a wave of airstrikes against dozens of Houthi targets on 11 January. The strikes - supported by Australia, Bahrain, the Netherlands and Canada - began after Houthi forces ignored an ultimatum to cease their attacks in the region.
But Biden administration officials denied that the new designation was an acceptance that the air campaign may not deter further Houthi attacks.
"We see these sanctions as one piece of a broader effort to bring the Houthis back from the terror attacks they are currently committing," one official said. "Our sanctions are best not seen in isolation but as part of a broader effort."
In the wake of last week's strikes, the Houthis said the US and UK would "soon realise" the action was "the greatest folly in their history".
"America and Britain made a mistake in launching the war on Yemen because they did not benefit from their previous experiences," the group's leader Mohammed al-Bukhaiti wrote on social media.
Yemen has been devastated by a civil war that escalated in 2015, when the Houthis seized control of large parts of the west of the country from the internationally-recognised government and a Saudi-led coalition intervened in an effort to restore its rule.
The fighting has reportedly left more than 160,000 people dead and triggered one of the world's worst humanitarian crises, with two thirds of the population - 21 million people - in need of some form of aid.
