Prada will stop using fur in all collections, commencing February 2020.
The move will affect all group brands - including Miu Miu, Church's, Car Shoe and Prada - following the spring/summer 2020 women's ranges.
In a statement, head designer Miuccia Prada said the brand is committed to social responsibility.
"Focusing on innovative materials will allow the company to explore new boundaries of creative design while meeting the demand for ethical products."
The fur ban is the result of a collaboration with the Fur Free Alliance, a coalition of over 50 animal rights organisations from 40 countries.
PETA Australia outreach and partnerships liaison officer Emily Rice welcomed the move.
"For years, PETA US has pushed Prada to reject cruelty from the inside – as a shareholder at the company's annual meetings.
"This follows over a decade of protests by PETA's affiliates – including crashing catwalks and organising street demonstrations – calling on the label to shed its skins.
"Its decision to ban fur is a triumph for animals and activists.
"But while PETA applauds Prada for joining the ever-growing list of fashion houses that are dropping fur, we now urge the brand to follow in Chanel's compassionate footsteps by also removing cruelly obtained exotic skins – including crocodile, lizard, and snake skins – from future collections.
"Most shoppers no longer wish to wear anything from any animal who was electrocuted, bludgeoned, and killed."
Italian fashion house Versace also recently announced it would phase out the use of fur. It joins Chanel, Coach, Burberry and Armani to ban the use of the material in collections.
Fendi, Max Mara, Celine, Valentino, Saint Laurent and Dolce & Gabbana continue to use fur in their ranges.