Church of England clergy found to be members of the British National Party or the National Front could lose their right to serve in the ministry as the two organizations' views are deemed un-Christian.
Church bishops said the two parties' views are incompatible with the teaching of the Church of England due to the stand they take on "equality of persons or groups of different races."
British media said it is the first time that Church of England clergy have formally been banned from membership of any political party.
The ban applies to clergy, ordinands, and employed lay people who have "duties that require them to represent or speak on behalf of the Church."
Those who defy the ban will face disciplinary procedures.
The Church of England is the national church of England and it is part of the 80-million strong worldwide Anglican Communion.
A BNP spokesman said, "This is indicative of the way that the Church of England is being politicised. What is written in the Bible and scripture is clearly of secondary importance to the politically correct option that these people adhere to.
"Where is it going to end? Are BNP members going to be allowed to be buried any more in churches? Is that where it is going to end? It makes you wonder. It is very sad to see the church go along with this."
The bishops' ban came after the Church of England General Synod gave final approval in 2012 to legislation making it "unbecoming or inappropriate" conduct for clergy to be members of a political party with policies declared incompatible with church teaching on race equality.
The synod, or national assembly of the Church of England, will now have an opportunity to debate and give formal approval to the declaration when it meets in the northern England city of York in July.
If there is no debate, the declaration will automatically come into force at the start of the meeting.
A Church of England spokesman told the Guardian newspaper it had not considered including the UK Independence Party on its taboo list.
UKIP got the highest number of votes in elections for members of the European Parliament at the end of May.
It has faced accusations of racism and been condemned for its anti-immigrant statements during the recent elections, but it is not on the church's list because it was not seen as overtly racist.
"I think if you look at both the BNP and NF and their manifestos and declarations it is quite clear they are racist groups," the Church of England spokesman told the Guardian.
The BNP leader, Nick Griffin, lost his seat as a Member of the European Parliament in May's elections. The party was also forced to change its constitution after it was found to be discriminatory by the courts.