The action, which is unprecedented, is aimed at preventing the rise of drug-resistant germs that infect people.
The FDA first proposed the ban five years ago, saying the use of the drug, Baytril, in chickens had made it difficult for doctors to treat human patients with food poisoning.
Farmers would sometimes use the drug to treat entire poultry flocks when only a few birds showed signs of respiratory disease.
FDA commissioner Lester Crawford says Baytril has not been shown to be safe for use in poultry.
The ruling will be effective from September 12, and does not affect other approved uses of the drug.
The Union of Concerned Scientists has applauded the ruling as a "big victory for public health."
Bob Walker, spokesman for Bayer's U.S. animal health division, says they are surprised and disappointed with the commissioner's decision.
He says Baytril was used in the mid-1990s to treat about 1 percent of the U.S. chicken population.
The drug Baytril is part of a family of potent antibiotics known as fluoroquinolones, which physicians consider valuable for treating serious infections in people.
This class of drugs includes Cipro, a well-known human antibiotic.
According to Health officials the widespread use of the drug by livestock farmers was one reason that more germs were becoming resistant to other fluoroquinolones.
It is known that Bacteria learn to outsmart antibiotics when repeatedly exposed to the medicines, and humans then pick up drug-resistant bacteria when they eat or handle contaminated meat.
Margaret Mellon, food director at the Union of Concerned Scientists declares it is big victory for public health in that the FDA has acted to protect the efficacy of human drugs.
She says the ban is the first time the FDA has withdrawn an antibiotic drug for animals because of a concern about its impact on human use.
Mellon hopes this is the first of many poultry drugs to be taken off the market because of concerns about antibiotic resistance.
Bayer says sales of Baytril do not represent a major part of the company's revenue.