Police said on Sunday they had repeatedly reported the venue shown on social media with crowds of young people dancing for breaking the quarantine decree.
They added that charges will be brought in court on Tuesday when an application will also be made to suspend its operation
The written announcement came as videos and photos were posted online of a specific venue in the free Famagusta area breaking distancing and other regulations in the quarantine decree.
The Health and Justice Ministers both took to Twitter on Sunday to voice concern over irresponsible behaviour which risks undoing progress in the battle against coronavirus.
In its statement, police said that on June 3, after obtaining information from social media that the venue would be organising events that would because of large attendance violate provisions of the quarantine law, they had called the owner to the police station and warned him about the provisions.
He assured police that the attendance would be within the numbers permitted and that clients would be sitting down at tables.
On Friday, police and Health Ministry officials checked the premises and found that it was operating without a licence from the deputy ministry of tourism and it was reported.
A second check was carried out that night where police found that violations of the decree as customers were not seated at tables but dancing throughout the venue. The business was booked.
On Saturday, the same premise was again booked for operating without a licence from the deputy ministry of tourism. And later, it was reported for breaking the quarantine law as guests were again dancing.
Today, a new check was carried out and the business was again booked because customers were not seated but dancing.
Police said a criminal case has been prepared and charges will be brought before Famagusta district court on Tuesday.
Police will also ask for the operation of the business to be suspended.
A bill approved by the Council of Ministers and sent to parliament proposes tougher penalties for businesses which violate the quarantine law. It would also allow authorities to apply to court to suspend the operation of premises which break the law.
The bill has been discussed but has not yet been approved by the House of Representatives where some political parties have expressed concern that penalties are excessive.