India has accused Jaish-e-Muhammad of orchestrating the Pulwama terror attack which brought the two nuclear powers on the verge of an all-out conflict,
"Big, small, all join together. Masood Azhar designated as a terrorist in UN Sanctions list Grateful to all for their support," tweeted Syed Akbaruddin, India's permanent envoy to the UN.
The decision means Masood's finances and assets will be frozen.
Along with India, the US, Britain and France put pressure on Beijing to change its stand. The US, the UK and France had recently pushed a fresh proposal to designate Masood as a global terrorist.
Earlier on Tuesday, China that "positive progress" had been made on listing Azhar. Chinese Foreign Ministry spokesman Geng Shuang also said the problem would be "properly resolved".
"I can only say that I believe that this will be properly resolved," Geng told reporters, responding to media reports that China had consented to lift its technical hold on the fresh proposal moved by France, the UK and the US to list Azhar under the 1267 Al Qaeda Sanctions Committee of the UN Security Council.
Last week, Indian foreign secretary Vijay Gokhale was in China and provided more evidence on the Jaish's role in terror attacks in India.