The crash, which killed all 189 people on board, was the first worldwide of Boeing Co's new 737 MAX jet.
In a statement signed by the Director General of the agency, Silas Udahemuka, the authority said that the ban takes effect immediately and remain in effect till further notice.
All of Boeing's 737 MAX jets, which are the best-selling model for Boeing with 72 percent of its 2018 deliveries, were officially grounded on Wednesday following an executive order by President Trump.
"An Ethiopian delegation led by Accident Investigation Bureau (AIB) has flown the Flight Data Recorder (FDR) and Cockpit Voice Recorder (CVR) to Paris, France for investigation".More news: 'It's time to revoke Article 50 and call off Brexit'
The day after the crash, without referring to Ethiopian tragedy directly, Boeing Corporation said it would deploy a software upgrade to the 737 MAX 8, a few hours after the Federal Aviation Administration said it would mandate "design changes" in the aircraft by April.
And this sources have told Reuters is similar to the one seen in the wreckage of an Indonesian Max 8 which crashed past year.
Aviation investigators have found a piece of a stabilizer in an unusual position in the wreckage of the Ethiopian airliner that crashed Sunday, killing all 157 people on board.
The cause of the crash is still unclear, experts suspect, but a technical Problem with the machine.
Budget airline Thai Lion Air is the only carrier that uses 737 Max aircraft for flights to Taiwan, Lin said.More news: Lonzo Ball becomes second Laker to be shut down for season
The announcement of the 737 MAX 8 ban in the US came as several of the planes were still in the air.
Boeing earlier assured that this type of aircraft was safe.
The 737 was the best-selling model in the aviation industry and was the top earner for Boeing. If all airlines with orders cancel their purchases, that would be another US$57 billion (AU$81 billion) impacted, Bloomberg reports.
Captain Dennis Tajer, a 737 pilot with American Airlines, met with Boeing executives in November, and said they weren't entirely forthcoming after the Lion Air crash. "We view the interruptions from the 737 Max grounding as a temporary one", he said in a note to clients.More news: I apologise to Britain, says Shamima Begum's dad