The International Agency for Research on Cancer (IARC) told the press on Tuesday that it had based its decision on "sufficient evidence that exposure is associated with an increased risk for lung cancer".
The new decision follows an IARC Monographs Meeting that took place from 5 to 12 June in Lyon, France, and places diesel engine exhaust in Group 1, alongside more than 100 other agents such as tobacco products, asbestos, benzene, UV rays and secondhand smoke.
The panel also noted that there was a link between exposure to diesel engine exhaust and higher risk of bladder cancer.
In 1988, IARC classified diesel exhaust as "probably carcinogenic to humans" (Group 2A). An advisory group said in 1998 that this classification should be reviewed.
Concerns about the cancer-causing potential of diesel exhaust have been rising, particularly after the publication of a number of epidemiological studies of workers in various settings.
The most recent evidence came in March 2012, when the Journal of the National Cancer Institute (JNCI) published a large study by the US National Cancer Institute and the National Institute for Occupational Safety and Health of underground miners' exposure to diesel engine emissions, that showed an increased risk of death from lung cancer in exposed workers.
Dr Christopher Portier, who chaired the IARC working group that reviewed the evidence, said:
"The scientific evidence was compelling and the working group's conclusion was unanimous: diesel engine exhaust causes lung cancer in humans."
"Given the additional health impacts from diesel particulates, exposure to this mixture of chemicals should be reduced worldwide," said Porter, who is Director of the National Center for Environmental Health and the Agency for Toxic Substances and Disease Registry at the US Centers for Disease Control and Prevention (CDC).
The panel also reviewed the evidence on gasoline (petrol) exhaust and concluded it should remain in the "possibly carcinogenic to humans" category (Group 2B), where it has been since 1989.
The IARC says there is now sufficient evidence for governments and decision makers to formulate environmental standards for diesel exhaust emissions and to work with engine and fuel manufacturers to attain these targets.
Dr Christopher Wild, Director of IARC, said the new ruling "sends a strong signal" for action to protect public health. He said action is "needed globally, including among the more vulnerable populations in developing countries where new technology and protective measures may otherwise take many years to be adopted".
More developed countries in North America, Europe and elsewhere have already been tightening up emission standards for diesel and gasoline/petrol engines, and as standards become more stringent, so the technology improves, which in turn allows standards to tighten further. Such changes have reduced sulfur content in fuel, increased efficiency in diesel engines, and led to reductions in exhaust emissions.
But fuels and engines that don't have these modifications are still around, and it may be many years before they are replaced, particularly in less developed countries with less stringent standards, said the IARC panel, noting that many developing countries don't have any regulation at all.
They also said there was limited information on the amount and health impact of diesel exhaust emissions on the general public.
Dr Kurt Straif, Head of the IARC Monographs Program, said that most of the evidence they reviewed was from studies that examined highly exposed workers.
"However, we have learned from other carcinogens, such as radon, that initial studies showing a risk in heavily exposed occupational groups were followed by positive findings for the general population. Therefore actions to reduce exposures should encompass workers and the general population", he added
Since 1971, the IARC has evaluated more than 900 agents, of which more than 400 have been identified as carcinogenic, probably carcinogenic, or possibly carcinogenic to humans.
A summary of the panel's evaluation is due to be published in an early online issue of The Lancet Oncology on 15 June.