The Welsh Government has issued new procurement guidance designed to eradicate the practice.
Finance Minister Jane Hutt said: “The use of blacklists is wholly unacceptable and I fully sympathise with the individuals and their families who have suffered a terrible injustice as a consequence of contractors engaging in this practice.
“Procurement is an important part of the overall policy toolkit of the Welsh Government.
“Under no circumstances is it acceptable for any business in receipt of public procurement expenditure to use blacklists.
“I am determined to take action in Wales. I trust that other Governments in the UK will take similar action if they have not already done so.”
It is understood the ban will only cover firms found to be still operating blacklists.
Contractors caught-up in construction’s historic blacklist scandal will still be able to bid for Welsh work if they have publicly apologised.
Unite Wales secretary Andy Richards said: “The Welsh government’s action to rid Wales of the scourge of blacklisting by ensuring that those who practice blacklisting do not benefit from public contracts is to be commended.
“We look forward to working with the Welsh government to put this policy into practice and urge other governments across the UK to follow suit in bringing in tougher laws to call time on blacklisting everywhere.”