The Information Ministry issued the order cancelling the permission mandatory for television broadcast in the country.
"Based on the Cabinet committee's decision, free-to-air TV channel Peace TV's downlink permission has been cancelled for violating downlink conditions," the ministry said.
Its spokesman said copies of the circular have been sent to Home Ministry, press information department, state-run BTV and cable operators association KOAB.
Reports from Bangladesh said that cable operators have begun stopping broadcast of the channel throughout the country after the government order.
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The action came a day after the Cabinet Committee on Law and Order decided to ban the Mumbai-based preacher's channel.
The doctor-turned televangelist is facing heat in India and Bangladesh after it emerged that Naik's speeches goaded some of the militants who stormed the upmarket cafe in Dhaka's diplomatic area on July 1, triggering to a hostage-situation.
Twenty two people, including 9 Italians, 7 Japanese, and an Indian girl, were hacked to death in the brutal attack.
There are allegations that Naik's NGO received funds from abroad but spent them on political activities and for radicalising people.
'Peace TV' was launched by Naik's Mumbai-based Islamic Research Foundation in 2006. An Urdu version was launched in 2009, followed by a Bangla version in 2011.
The contents in English, Urdu and Bangla are telecast from Dubai.
Last week, Bangladesh Home Minister Asaduzzaman Khan said intelligence agencies were investigating the 50-year-old Naik for his possible role in influencing the cafe attackers.
Naik's financial transactions are also under the scanner.
Britain and Canada have banned Naik from visiting the two countries several years ago while Malaysia banned his lectures fearing that they could instigate inter-racial tensions.
Experts say Naik could not be accused of openly inciting terror but his preaching were a heady mix of ingredients which could abet radicalisation of the extreme kinds.
Rohan Imtiaz, one of the young terrorists who carried out the attack on the cafe, had quoted Naik in a Facebook post in January where he urged "all Muslims to be terrorists".