The US president says the country is facing an "invasion" from a criminal organisation that has been linked to kidnapping, extortion, organised crime and contract killings.
In invoking the Alien Enemies Act of 1798, Trump said members of the gang were "conducting irregular warfare and undertaking hostile actions against the United States", with the goal of destabilising the country.
The act, which has only been used in times of war, could allow the president to bypass the due process rights of migrants categorised as threats and rapidly deport them.
While the proclamation was released by the White House on Saturday, the wording suggests Trump signed it on Friday.
Under Trump's proclamation, all Venezuelan citizens 14 years of age or older who are found to be members of the gang, are within the US, and are not naturalised or lawful permanent residents of the country are "liable to be apprehended, restrained, secured, and removed as Alien Enemies".
The Alien Enemies Act is best known for its use to justify internment camps for people of Japanese, German and Italian descent during World War Two.
Civil rights groups and some Democrats have criticised the idea of reviving it to fuel mass deportations and the move will likely trigger legal challenges.
The Trump administration in February designated Tren de Aragua, the Sinaloa Cartel and six other criminal groups as global terrorist organisations.
Saturday's directive said that Tren de Aragua "has engaged in and continues to engage in mass illegal migration to the United States to further its objectives of harming United States citizens".
Trump made the threat posed by the gang a regular feature of his campaign speeches as evidence of what he called a spike in "migrant crime".
His action came as a federal judge on Saturday temporarily blocked the US government from deporting five Venezuelans after two non-profit groups sued saying invocation of the act would be illegal as it has only been "a power invoked in a time of war, and plainly only applies to warlike actions".
The court granted a temporary restraining order, stopping the government from deporting them for 14 days. The American Civil Liberties Union, one of the groups that brought the suit, said the Venezuelans are seeking asylum.
Court papers show the government has appealed the judge's temporary restraining order.
Trump returned to the White House on January 20, vowing to deport millions of immigrants living in the US illegally.
with AP
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