A large number of people, especially youth and children, had been found to be buying the gum from shops and using it as an intoxicant in the state, Health Minister V S Sivakumar said.
"The collection, distribution and sale of the gum through unlicensed stores is banned in the state considering public health," he said.
The minister also made it clear that the substance would be sold only through licenced drug stores with doctors' prescription.
Kerala banned gutka and pan masala, containing tobacco and nicotine, in 2012.