But the company said exceptions to the policy meant it would still allow animal testing when that was the only way of proving the safety of products already being sold in the market, and in some countries where animal testing is legally required.
The policy, which starts from April, applies to all of the Tokyo-based cosmetic giant's production sites, including those run by suppliers, it said.
"Our business partners that supply material to us will not rely on animal testing, while we will no longer outsource such testing to outside labs," a Shiseido spokesman said.
The policy was officially adopted at a board meeting Thursday, he added.
Activists have for years pressured cosmetic firms and other companies that use animal testing to find alternatives to the practice, which they say is cruel and unnecessary.
Shiseido, which dropped animal testing at its own labs in 2011, sells into the key Europe market, which is getting set to complete a ban on the import and sale of animal-tested cosmetic products from later this month.
Shiseido said it could ensure the safety of its products through others means, including using data from past experiments, human volunteers and other kinds of testing.