The move has been welcomed by activists who say the holiday character of Zwarte Piet is racist.
Facebook has updated its policies on hate speech to ban content showing images of blackface.
Caricatures of black people, such as "Zwarte Piet" - translated as "Black Pete" - may now be removed from the platform.
Zwarte Piet is a traditional Christmas character in the Netherlands and Belgium, a "helper of Saint Nicholas" who is usually represented by a white person wearing blackface.
The character has received widespread criticism from activists, who argue that the tradition is racist. Some towns and cities have recently phased out blackface from street parties.
The move by Facebook has been praised by Jerry Afriyie, one of the founders of the Kick Out Zwarte Piet campaign.
"August 11th, 2020 is a happy day," said Afriyie in a post on Facebook.
"We are hopeful that this international recognition will help the rest of the Netherlands understand that we are ready for a celebration that is fun for all children."
The social network has also prohibited anti-Semitic Jewish stereotypes, such as claims that Jews rule the world or serve in important global institutions.
Facebook confirmed to Euronews that the decisions were made after consultation with "more than 60 outside experts".
"We are strengthening our hate speech policy to remove more implicit hate speech, such as stereotypes about Jewish people controlling the world or content depicting blackface," said a Facebook company spokesperson.
"Images and videos of Black Piet that contain blackface may be removed from Facebook and Instagram when they are reported to us."
However, the company said that images of Piet that do not feature blackface - such as Chimeny Piet - will not be removed from Facebook.
Between April and June, Facebook says they took action on 22.5 million pieces of content containing hate speech. This represented a significant increase from the 9.6 million posts that had been acted on from January to March.
Meanwhile, Instagram also took action against 3.3 million pieces of content in the same period, up from 809,000 during the first three months of 2020.
"We’ve made progress in combating hate on our apps, but we continue to refine our policies as speech and society evolve," a Facebook spokesperson told Euronews.