The motion, titled "Zionism is racism," was passed by 1,022 votes to 813, despite opposition from the bulk of the party's MPs.
The policy defines Zionism as necessarily racist because it "privileges one ethnic group on the basis of the subjugation of others." It calls for Zionism to be "treated as any other form of racism" and for a single Palestinian state to replace Israel, "with equal rights for all."
The motion specifies that it is aimed at the political ideology and practice of Zionism, "not at the religious or ethnic background of those who may identify as Zionists. Not all Jews are Zionists and not all Zionists are Jews."
The motion had been pushed by a group called Greens for Palestine, which encouraged non-party members to join the party to ensure the policy was debated and adopted.
Amendments that sought to limit the motion's impact were voted down, including one that would have prevented the policy from being used to "pressure, proscribe or discipline members based on affiliation with Jewish community institutions."
Four of the party's five MPs condemned the motion, as did former leader Caroline Lucas, the Green's first MP. Adrian Ramsay, who co-led the party before current leader Zack Polanski, said in a statement he would vote against it.
Polanski, who is Jewish, missed the vote to campaign in a by-election in Holborn and St Pancras. Asked whether he believed Zionism was racist, he told the BBC: "Well, in the motion, it is defined as the displacement and genocide of the Palestinian people. I think that is clearly racism."
Some Jewish Greens have privately expressed concern the policy could make it difficult for them to remain in the party. A poll by the group Jewish Greens found its membership was split over whether to oppose the motion, while 81% said they did not identify as Zionist.
The motion is now formal policy for the Greens in England and Wales.