The social media giant also pledged to improve its ability to identify and block material from terrorist groups.
Facebook users searching for offending terms will be directed to a charity which combats far-right extremism.
The social network has come under pressure after a man livestreamed an attack on two mosques in New Zealand.
Facebook had previously allowed some white nationalist content it did not view as racist - including permission for users to call for the creation of white ethno-states.
The company said it had deemed white nationalism an acceptable form of expression on a par with "things like American pride and Basque separatism, which are an important part of people's identity".
But in a blog post on Wednesday it said that after three months of consultation with "members of civil society and academics", it found that white nationalism could not be "meaningfully separated" from white supremacy and organised hate groups.