The Italian data-protection authority said there were privacy concerns relating to the model, which was created by US start-up OpenAI and is backed by Microsoft.
The regulator said it would ban and investigate OpenAI "with immediate effect".
OpenAI told the BBC it complied with privacy laws.
Millions of people have used ChatGPT since it launched in November 2022.
It can answer questions using natural, human-like language and it can also mimic other writing styles, using the internet as it was in 2021 as its database.
Microsoft has spent billions of dollars on it and it was added to Bing last month.
It has also said that it will embed a version of the technology in its Office apps, including Word, Excel, PowerPoint and Outlook.
There have been concerns over the potential risks of artificial intelligence (AI), including its threat to jobs and the spreading of misinformation and bias.
Earlier this week key figures in tech, including Elon Musk, called for these types of AI systems to be suspended amid fears the race to develop them was out of control.
The Italian watchdog said that not only would it block OpenAI's chatbot but it would also investigate whether it complied with General Data Protection Regulation.
GDPR governs the way in which we can use, process and store personal data.
The watchdog said on 20 March that the app had experienced a data breach involving user conversations and payment information.
Source: www.bbc.com
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