A newly created media watchdog, the News and Communication Directorate, on Friday gave Xavier Bonilla 72 hours to "correct" the caption of the offending cartoon.
It also fined El Universo, the newspaper that published it, two per cent of its revenues in the last quarter.
At a news conference at Quito's Plaza del Teatro, Bonilla, who signs his cartoons 'Bonil,' condemned the sanction as "illegal and unconstitutional."
But Bonilla said he would make the correction demanded because the order requires "immediate compliance."
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Bonilla's cartoon depicted a police search at the home of an advisor to an opposition deputy, whom the government suspected of leaking hacked email messages.
The caption said police confiscated "allegations of corruption." Correa filed a complaint last month, demanding that Bonilla prove the assertion.
"So now they say it is 'a joke' to state that searches were carried out to seize documents on 'corruption,'? In other words, say what the suspects claim?" Correa tweeted.
"How long must we put up with these acts of social deceit? Fortunately we now have the Communications Law, which will ensure trials take place in courtrooms and not in (newspaper) headlines or cartoons," Correa added.
In 2012, Correa won a defamation case against El Universo, which saw three directors and one former editor sentenced to three years in prison and ordered to pay USD 40 million.
The president eventually pardoned them, and the case was shelved.