The reason is, according to the government, that "articles have damaged the State of Israel's legitimacy and right to self-defense", reports Haaretz.
The decision is also said to be a reaction to a speech made by the newspaper's publisher Amos Schocken in London last month, in which he allegedly supported terrorism and called for sanctions against the government.
The newspaper writes that in his speech, Schocken accused Prime Minister Benjamin Netanyahu's government of apartheid against Palestinians and mentioned "Palestinian freedom fighters", which he later clarified did not refer to Hamas, labeled as a terrorist organization.
Haaretz is Israel's oldest newspaper and is often described as left-liberal. The newspaper calls the government's decision "another step in Netanyahu's journey towards dismantling Israeli democracy."
Corrected: In an earlier version of the article, the decision was described incorrectly.