Pompeo announced late on Sunday that he meant to notify Congress of the Trump administration's decision to list the Houthis as an FTO, and added that he plans to blacklist three Houthi leaders, Abdul Malik al-Houthi, Abd al-Khaliq Badr al-Din al-Houthi, and Abdullah Yahya al-Hakim, as Specially Designated Global Terrorists (SDGT).
Houthi official Mohammed Ali al-Houthi said on Twitter that the movement reserved the right to respond to any designation.
Unless Congress blocks the decision, the Huthis will be blacklisted on January 19 - one day before the inauguration of President-elect Joe Biden, whose aides had hoped to mount a fresh push to end Yemen's devastating six-year-old war.
United States officials and analysts say Iran has armed the Huthis, but some experts question the extent of cooperation and see Tehran primarily as interested in bogging down Saudi Arabia, whose brutal air campaign has included strikes on civilian targets.
In December, the UK pledged £14 million to avert mass starvation in Yemen as the United Nations warned the country was on the brink of famine.
The next year, Saudi Arabia formed an Arab coalition to fight the Iran-backed group on behalf of the exiled government.
While Trump has vetoed multiple congressional efforts to end the United States support for Yemen, Biden has repeatedly said he plans on ending Washington's assistance to the Saudi-led coalition. "Are there elements among the Houthis who have been involved in terrorist acts?" Because the Houthis are the de facto authorities in an area in which roughly 80% of Yemenis live, distributing humanitarian supplies to civilians in those areas requires a degree of coordination between relief organizations and Houthi-run government agencies. "Our humanitarian work must not be criminalised", Jan Egeland, secretary general of the Norwegian Refugee Council, said in November.
The State Department did not immediately respond to a request for comment. We must work with, for and among civilians in conflict and crossfire.
The Trump administration has been piling on sanctions related to Iran in recent weeks, prompting some Biden allies and outside analysts to conclude that Trump aides are seeking to make it harder for the incoming administration to re-engage with Iran and rejoin an global nuclear agreement.
Pompeo said the administration recognizes their concerns and will put in place measures to reduce the designation's impact on certain humanitarian activity and imports.
The UN describes Yemen as the world's largest humanitarian crisis; 80 per cent of its people are reliant on aid and the country is at risk of the worst global starvation in a century.
Mr Pompeo issued the statement shortly before midnight on a Sunday.
The administration had been weighing the formal designation of the Houthi rebels as a "foreign terrorist organization" for months.
In a separate development, Pompeo spoke at Voice of America's headquarters in Washington on Monday, taking questions on camera for the first time since a mob of supporters of President Donald Trump overran the Capitol last week as lawmakers were certifying Biden's presidential victory.
Labeling the Houthis a "foreign terrorist organization" criminalizes material support for the group, which retains control of the capital, Sanaa, the strategic port city of Hodeidah and much of northern Yemen.
Pompeo was also expected to re-designate Cuba as a "state sponsor of terrorism", according to several administration officials.