The move to ban posts that deny the Holocaust follow a campaign by survivors.
The company announced the change to its hate speech policy on Monday.
Facebook says enforcement won't happen overnight as training takes time.
The update follows a crackdown on other forms of hate speech, including the banning of a number of white supremacist groups.
And with just a few weeks to go before the November 3 election, Facebook started expanding restrictions on political advertising.
Facebook bans have been put on messages claiming widespread voter fraud.
Facebook has changed its hate speech policy to ban posts that deny the Holocaust - the company will also direct people to 'authoritative sources' in search results.
Mark Zuckerberg announced the new policy during an update on its efforts to take action against conspiracy theories and misinformation ahead of the US election.
The decision comes amid a push by Holocaust survivors around the world over the summer who lent their voices to a campaign targeting Zuckerberg.
As part of the campaign he was urged to remove Holocaust denial posts from the social media site and combat misinformation on the subject.
Facebook says enforcement of these new policies 'won't happen overnight' as there is a range of content that could violate the rules and training will take time.
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Coordinated by the Conference on Jewish Material Claims Against Germany, the campaign used Facebook to make the survivors' entreaties to Zuckerberg heard.
The group posted one video per day to Facebook urging the CEO urging him to remove Holocaust-denying groups, pages and posts as hate speech.
The Anti-Defamation League has reported that incidents of white supremacist propaganda jumped by more than 120 per cent between 2018 and last year.
Tech companies began promising to take a firmer stand against accounts used to promote hate and violence after a 2017 rally in Charlottesville, US where a self-described white supremacist drove into a crowd of counter protesters.
'Our decision is supported by the well-documented rise in anti-Semitism globally and the alarming level of ignorance about the Holocaust, especially among young people' explained Facebook head of content policy Monika Bickert.
'According to a recent survey of adults in the US aged 18-39, almost a quarter said they believed the Holocaust was a myth, that it had been exaggerated or they weren't sure.'
Zuckerberg said in a blog post Monday he believe the new policy strikes the 'right balance' in drawing the lines between what is and isn't acceptable speech.
'I've struggled with the tension between standing for free expression and the harm caused by minimizing or denying the horror of the Holocaust,' he wrote.
'My own thinking has evolved as I've seen data showing an increase in anti-Semitic violence, as have our wider policies on hate speech.'
The update follows a crackdown on other forms of hate speech, including the banning of a number of white supremacist groups, as well as content around militia groups and the QAnon conspiracy theory.
Bickert said: 'Today's announcement marks another step in our effort to fight hate on our services.'
Zuckerberg had raised the ire of the Claims Conference, based in New York, and others with comments in 2018 to the tech website Recode that posts denying the Nazi annihilation of 6 million Jews would not necessarily be removed.
He said he did not think Holocaust deniers were 'intentionally' getting it wrong.
The Facebook CEO said at the time that as long as posts were not calling for harm or violence, even offensive content should be protected.
After an outcry, Zuckerberg, who is Jewish himself, clarified that while he personally found 'Holocaust denial deeply offensive' he believed that 'the best way to fight offensive bad speech is with good speech.'
'Enforcement of policies cannot happen overnight,' Facebook said in a blog post.
'There is a range of content that can violate these policies, and it will take some time to train our reviewers and systems on enforcement.'
Last week, Facebook said it will ban groups that openly support QAnon, the baseless conspiracy theory that paints President Donald Trump as a secret warrior against a supposed child-trafficking ring run by celebrities and 'deep state' government officials.
The company said Tuesday that it will remove Facebook pages, groups and Instagram accounts for 'representing QAnon' - even if they don't promote violence.
The social network said it will consider a variety of factors to decide if a group meets its criteria for a ban, including its name, the biography or 'about' section of the page, and discussions within the page, group or Instagram account.
Mentions of QAnon in a group focused on a different subject won't necessarily lead to a ban, Facebook said. Administrators of banned groups will have their personal accounts disabled as well.
And with just a few weeks to go before the November 3 election, Facebook started expanding restrictions on political advertising, including new bans on messages claiming widespread voter fraud.
The prohibitions were laid out in a blog post earlier this month after Trump raised the prospect of mass fraud in the vote-by-mail process during a debate with Democratic rival Joe Biden.
Banned ads 'would include calling a method of voting inherently fraudulent or corrupt, or using isolated incidents of voter fraud to delegitimize the result of an election,' Rob Leathern, Facebook's director of product management, tweeted.
The changes apply to Facebook and Instagram and are effective immediately, he said.
The ban includes ads that call an election into question because the result isn't determined on the final day of voting. There is a good chance US election results will require additional time this year because of expanded mail-in ballots due to the pandemic.
Also banned are advertisements portraying voting or census participation as meaningless and advising people not to take part.
The Trump administration has been trying to end the 2020 US census early, as part of what opponents say is a strategy to enhance the political power of Republicans and non-Hispanic whites by undercounting minorities and others in hard-to-count communities.
The census numbers are used to decide how many congressional seats each state gets for the next decade.
Facebook had already unveiled a raft of measures to prevent its platform from being used to sow chaos and spread misinformation before, during and after the US presidential election on November 3.
The social media giant banned ads that prematurely declared an election victory.
Before that, it said would restrict new political ads in the week before the election and remove posts that convey misinformation about COVID-19 and voting.