Shoppers will have to bring their own reusable bags or pay at least 5 cents (3p) each for recycled paper ones under the ban which was approved by state politicians.
Californians currently use an estimated 19 billion plastic bags a year, equivalent to 552 for each person, only five per cent of which are reused.
The cities of San Francisco and Malibu had already banned plastic bags and the statewide ban, which also includes pharmacies, grocery stores and liquor stores, is likely to begin at the start of 2012.
Environmentalists said it would help to stop pollution and fouling of beaches but the American Chemistry Council estimated it would amount to a $1 billion US tax on shoppers and threaten 500 jobs in the plastic bag manufacturing business.
Ted Gaines, a Republican state politician who opposed the ban, said his family would have to spend $50 (pounds 34) a year on paper bags.
Julia Brownley, the Democrat who proposed the move, said: “The biggest way to eliminate this kind of pollution is to ban it. Plastic bags take five minutes to use and 500 years to decompose.”