"The press watchdog banned Etemad and referred the case to the judiciary for repeated and persistent violations," the report said without giving the newspaper's alleged offences.
Etemad, banned for the first time, was founded eight years ago and is one of the few reformist papers which survived a crackdown on critical media especially since last year's disputed re-election of President Mahmoud Ahmadinejad.
The newspaper was, however, warned a few weeks ago along with several other publications for printing criticism by reformists of the situation after Ahmadinejad's re-election in June 2009.
Etemad (Trust), was singled out for publishing remarks of former Iranian president turned opposition supporter Mohammad Khatami, saying the country was facing a "crisis."
The watchdog also revoked the licence of Irandokht (Daughter of Iran) weekly over "not meeting the conditions in the press law on practical commitment to the constitution," ISNA said.
Karroubi's wife Fatemeh and son Hossein first launched Irandokht as a women's lifestyle magazine, but a new editorial team switched its coverage to political and cultural affairs two months ago.
Security forces raided the magazine's offices in December when the new editor Mohammad Ghoochani took over, and authorities have since jailed one of its journalists, human rights campaigner Emadeddin Baghi.
Iran's reformist journals which burgeoned during Khatami's 1997-2005 presidency have been shut down one after another under Ahmadinejad. Most leading reformist dailies have been banned.
Dozens of journalists working for the publications have also been jailed since street protests broke out in Iran against the June election which the opposition charges was massively rigged in Ahmadinejad's favour.
