The Supreme Court said the youth group Jarrai and its successors Haika and Segi were terrorist organizations. Prosecutors had earlier argued the same, stressing that the groups used explosives and incendiary devices.
The groups have been known for staging acts of street violence, such as burning buses or throwing petrol bombs at buildings or bank tellers.
ETA and its political arm Batasuna are regarded as terrorist organizations not only by Spain, but also by the European Union and the United States.
The Supreme Court's decision came in a tense atmosphere following the end of a six-month nascent peace process between ETA and Prime Minister Jose Luis Rodriguez Zapatero's Socialist government.
Zapatero suspended the peace process after ETA killed two people in a Madrid airport car bombing on December 30.
Zapatero is now seeking a united front of the parliamentary parties against ETA, but the opposition conservatives have refused to join in, accusing the premier of a weak anti-terrorism policy.
ETA is blamed for more than 800 deaths in its campaign of nearly four decades for an independent Basque country.