The new policy, which comes into effect on January 16 next year, has already sparked complaints.
Users of Instagram, which was bought by Facebook three months ago, have no way of opting out of the new rules unless they deleted their accounts prior to them coming into effect.
The new policy gives Facebook the right to use all photos on Instagram, whether in licencing them to companies or using them in advertising campaigns.
The reaction on Twitter to the news was negative, with one user saying: “Never thought I'd say this but time time to move to #flickr and figure out how to delete my Instagram account once and for all."
Another said: “Instagram is now the new iStockPhoto, except they won't have to pay you anything to use your images.”
Others have been quick to come up with ways of rescuing photos from Instagram and closing an account prior to the deadline.