Under the new law, prosecutors can name someone a terrorist, freezing their assets, and barring them from public life or travel, with only simple approval from a panel of judges, and without a trial. The listing is valid for three years and can be renewed.
The legislation was signed in the form of a decree by President Abdel-Fattah el-Sissi last week and was distributed to reporters today.
The authorities have also waged a sweeping crackdown on supporters of ousted Islamist President Mohammed Morsi, as well as young activists and groups that fuelled the uprising that toppled autocrat Hosni Mubarak in 2011.
Internationally, Egypt has pushed allies for closer cooperation to combat terrorism in the region, particularly in neighbouring Libya.
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Rights activists criticised the law, saying it only serves to expand Egypt's existing arsenal of legislation that empowers authorities against political opponents.
Egypt has been without an elected parliament since 2012 when the last elected house was dissolved by a court order.
El-Sissi has the power to approve new laws in the form of decrees.
The new law defines a terrorist group as any entity that calls "by any means, inside or outside the country, for harming individuals, terrorising them or putting their lives, freedoms, rights or security in danger."
It also includes any group that uses "any means" to disturb public order, endangers security or state interests, and seeks to "disrupt the constitution or law, or harm national unity.