A Vatican spokesman said it was being closed because of “financial and liturgical irregularities”.
The Cistercian monks based at the Santa Croce in Gerusalemme church are being transferred to other churches in Italy, Italian media reports say.
They reportedly racked up large debts.
“An inquiry found evidence of liturgical and financial irregularities as well as lifestyles that were probably not in keeping with that of a monk,” said Father Ciro Benedettini, a Vatican spokesman.
The ban was adopted in March following the inquiry, but had not yet been made public, reports said.
The nun at the centre of the controversy, Anna Nobili, spent many years working in Italian nightclubs.
After becoming a nun, she began performing what she called The Holy Dance in a performance at the monastery in front of senior Catholic clerics including Archbishop Gianfranco Ravasi, head of the Vatican’s cultural department.
Several years ago, she swapped her old life for the church, after a visit to the shrine of St Francis in Assisi, a place of pilgrimage for millions of Catholics in Umbria.
Santa Croce is one of Rome’s oldest and most prestigious churches, and was built around a chapel dating back to the 4th Century.
—BBC News