The announcement set the stage for a showdown, as Iran immediately responded with threats on all ports in the Persian Gulf and the Gulf of Oman.
"Security in the Persian Gulf and the Sea of Oman is either for everyone or for NO ONE," the Islamic Republic of Iran Broadcasting reported Monday.
"NO PORT in the region will be safe," according to a statement from the Iranian military and the Revolutionary Guards.
US Central Command announced the blockade would begin on Monday at 10am, Washington time, on Monday (12am on Tuesday AEST) and would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf (Persian Gulf) and Gulf of Oman".
CENTCOM said it would still allow ships travelling between non-Iranian ports to transit the strait, a step down from the president's earlier threat to blockade the entire strait.
The announcement of the blockade halted the limited ship traffic that resumed in the strait since the ceasefire, said an early report from Lloyd's List intelligence.
Marine trackers say more than 40 commercial ships have crossed since the start of the ceasefire, down from roughly 100 to 135 vessel passages a day before the war.
The move came after marathon US-Iran ceasefire talks in Pakistan ended without an agreement on Saturday.
US Vice-President JD Vance said the talks stalled after Iran refused to accept American terms to refrain from developing a nuclear weapon.
Iran has demanded compensation for damage caused by US-Israeli strikes that launched the war on February 28, and the release of Iran's frozen assets.
The blockade is likely intended to add pressure on Iran, which has exported millions of barrels of oil since the war began, much of it likely carried by so-called "dark" transits that evade Western government sanctions and oversight.
Trump also hopes to undercut Iran's control over the Strait of Hormuz after demanding that it reopen the waterway where a fifth of global oil transited before fighting began.
A US blockade could further rattle global energy markets.
Oil prices rose in early market trading after the blockade announcement.
The price of US crude rose eight per cent to $US104 a barrel, and Brent crude oil, the international standard, rose seven per cent to $US102.
Brent crude cost roughly $US70 per barrel before the war.
Prime Minister Keir Starmer told BBC radio on Monday that Britain would not be part of a US blockade of Iranian ports in response to the closing of the Strait of Hormuz and that Britain is "not getting dragged into the war".
He said UK efforts remained focused on reopening the key shipping route, and that Britain might help with mine clearing in the waterway, but only after the fighting stopped.
A chorus of top-ranking Iranian officials threatened retaliation.
Iranian parliament speaker, Mohammad Bagher Qalibaf, who led Iran's side in the talks, addressed Trump in a statement on his return to Iran: "If you fight, we will fight."
Iran's Revolutionary Guard later said the strait remained under Iran's "full control" and was open for non-military vessels, but military ones would get a "forceful response", Iranian news agencies reported.
During the 21-hour talks this weekend in Pakistan, the US military said two destroyers had transited the strait ahead of mine-clearing work, a first since the war began.
Iran denied it.
