It became a must-visit for tourists flocking to Thailand after it was made famous by the Leonardo Di Caprio film ''The Beach''.
Located on the island of Phi Phi Leh, it was temporarily closed last year after most of its coral had died as a result of up to 5,000 people a day visiting.
It said the bay, part of a national park, will be closed ''until the marine natural resources return to their normal condition.”
The announcement said an assessment by the Department of National Parks, Wildlife and Plant Conservation found that after having been closed to tourists for four months, Maya Bay still had not recovered.
Many Thai marine national parks are shut annually for four months from mid-May to mid-October during the monsoon season
However Maya Bay, part of the Hat Noppharat Thara-Mu Ko Phi Phi National Park, remained open all year round to cope with tourist demand after it was picked as the central location for the Hollywood box office smash The Beach.
The dark backpacker tale based on a novel by Alex Garland turned Di Caprio into a global star and saw thousands flock to Maya Bay.
The beach at Maya Bay had received an average of 200 boats and 4,000 visitors each day.
Recent surveys by a team led by marine biologists found a large part of the coral reefs in the area is gone and sea life has virtually disappeared.
Thailand has around 35 million international visitors last year, a five-fold increase in little more than two decades.
Thon Thamrongnawasawat, a marine biologist and member of a government committee on development and the environment has previously spoken about how important the ban is for the environmental rehabilitation of Maya Bay.
Speaking last year, he said: “I tried to push this campaign for many many years, but you know in Thailand we are a tourism industry country and we need a lot of money, so before not so many people listened.
“It should have been done 10 years ago but at least it has been done.”
The government has said when Maya Bay does reopen it will set a limit of 2,000 tourists a day when the bay reopens — about half the current cap. Boats will no longer be allowed to anchor but must dock on the opposite side of the island.