State television announced Tuesday that the decision was made "in order to prevent the recurrence of racial and religious riots."
The magazine's cover carries a photo of a Buddhist monk, Wirathu, with the words "The Face of Buddhist Terror." Wirathu is a leader of a radical movement of monks that preaches that the country's small Muslim minority threatens racial purity and national security. He has called for restrictions on marriages between Buddhists and Muslims, and for boycotts of Muslim-owned businesses.
Nearly 250 people have died and tens of thousands, mostly Muslims, have fled their homes in religious violence in the past year. Buddhist mobs have marched through villages burning houses and mosques and brandishing machetes and clubs.
A special committee led by the home minister to deal with the recent violence said the Time article could damage government efforts to build trust among people of different religions, state television said.
The article quotes Wirathu as saying, "Now is the time to rise up, to make your blood boil." Nevertheless, Witharu insists he's a man of peace.
The article has drawn anger from Buddhists. On Sunday, the President's Office issued a statement denouncing the story and saying it damages the image of Buddhism.
The recent violence has threatened to undermine political and economic reforms undertaken by President Thein Sein, who came to power in 2011 after almost five decades of repressive military rule.
New freedoms of speech under Thein Sein have made it easier to disseminate radical views, while exposing deep-seeded racism felt by much of the population toward Muslims and other minorities.