Sheikh Isa Qassim, considered the spiritual leader of Bahrain's Shiite majority, was alleged to have used his position to "serve foreign interests and promote... sectarianism and violence," the ministry said in a statement carried by BNA state news agency.
Qassim "adopted theocracy and stressed the absolute allegiance to the clergy," the ministry said, adding that he had been in continuous contact with "organisations and parties that are enemies of the kingdom."
The decision follows the suspension of Bahrain's main Shiite opposition group, Al-Wefaq, whose political chief Sheikh Ali Salman is serving a nine-year jail term for inciting violence.