Somalia's permanent representative to UN Ambassador Abukar Osman celebrated Wednesday's resolution, arguing that declaring Al-Shabaab a terrorist group would have further weakened efforts to disintegrate it.
The UN Security Council has rejected Kenya-backed resolution to list Somali based armed group on 1267 on Wednesday.
United States, France, Belgium, Germany, Kuwait, and Poland rejected the Kenyan government's move at the assembly.
Somalia's ambassador to the United Nations, Abukar Dahir Osman commended council members for rejecting what he termed as unjustified move.
"Commend Council members for rejecting the unjustified listing of AS to 1267." Ambassador Dahir said after the decision.
UN security council has instead urged Kenyan Government to implement existing Security Council resolution 751 targeting al-Shabaab including the ban of illegal charcoal trade in which is the lifeline of the group to finance its operations in the region.
Aid agencies have earlier warned that if approved the move would have "criminalized humanitarian aid" at a time when 18% of Somalis face the risk of severe hunger.
Kenya believed that if the United Nations formally classifies Somali militia group, Al-Shabaab, as a terrorist group, then there would be more action on combating the extremists.
Leading non-governmental organizations and former US top officials wrote to US Secretary of state, Mike Pompeo last week calling for Washington to reject Nairobi move arguing that if approved the decision will have a catastrophic impact on lives of people living in areas controlled by the armed group in Somalia.