Association of University Teachers (AUT) General Secretary Sally Hunt, announcing the boycott in London on Friday, said members have been asked to avoid all academic or cultural cooperation with Haifa University and Bar-Ilan University in Tel Aviv.
The AUT council voted to boycott Bar-Ilan because it runs courses at colleges in the occupied West Bank and "is thus directly involved with the occupation of Palestinian territories contrary to United Nations resolutions".
It boycotted Haifa because the university disciplined a lecturer for supporting a student who wrote about attacks on Palestinians during the founding of the state of Israel.
The boycott, which is not compulsory, will last until Haifa "ceases its victimisation of academic staff and students who seek to research and discuss the history of the founding of the state of Israel," it said.
The AUT said it voted for the boycott in response to a plea for action by a group of Palestinian academics.
British university administrators and Jewish student groups were outraged.
"It is a betrayal of academic principles - it looks like they are moving backwards into the hatred of the past few years," Union of Jewish Students spokesman Danny Stone said.
Universities UK, representing university executives, called the union's resolution "inimical to academic freedom, including the freedom of academics to collaborate with other academics".
Bar-Ilan is "directly involved with the occupation of Palestinian territories contrary to United Nations resolutions"
AUT general secretary
Britain's community of about 10,000 Jewish students has complained that opposition to Israeli policies by student and teacher groups has fuelled anti-Semitism.
The AUT's executive committee said it would look further into a call to boycott a third university, the Hebrew University of Jerusalem, after claims that the institution had confiscated land occupied by Palestinian families in east Jerusalem.
The union has previously rejected calls for a boycott of all Israeli institutions but agreed on Friday to circulate a Palestinian plea for broader action to regional associations.
The Israeli embassy in London was not immediately available for comment.