Lanterns, one of Bahrain's most popular Indian restaurants, was shut down by authorities this week after a video of a manager refusing entry to a woman wearing a veil was widely circulated.
The incident happened in the Adliya branch.
The Bahrain Tourism and Exhibition Authority said it launched an investigation into the issue, and had closed the restaurant in accordance with Decree Law Number 15 of 1986, which relates to tourism-related establishments, according to local media reports.
"We reject all actions that discriminate against people, especially regarding their national identity," the authority said.
It is not clear how long the restaurant will be closed for, but its management team also released a statement on social media, saying the incident was the "mistake" of a manager who has now been suspended.
"Everyone is welcome to Lanterns as how it has been for more than 35 years that we have been serving all nationalities in the beautiful Kingdom of Bahrain," it said.
"Lanterns is a place for everyone to come enjoy with their families and feel at home."
As a "goodwill gesture", the restaurant is now offering free food to Bahraini diners on Tuesday, March 29.
Lanterns opened as an individual restaurant in 1987, later expanding to encompass four branches across the island, in Adliya, Budaiya, Amwaj Islands and Riffa.
The Adliya branch, where the incident took place, was particularly popular, consisting of a restaurant, outdoor terrace and bar area.
The brand has won several local restaurant awards over the years.
"We take pride in serving tasty Indian food with native picks from all over India with specialities derived from the regions of Punjab and the northern side of India," reads a description on the restaurant's website.
Other popular Indian restaurants in Bahrain include Copper Chimney, Rasoi by Vineet and Nirvana.
Scroll through the gallery below to see photos of the recent Bahrain Grand Prix:
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Ferrari's Bahrain Grand Prix winner Charles Leclerc celebrates after the opening race of the season. AFP -
Mercedes driver Lewis Hamilton greets Ferrari drivers Carlos Sainz of Spain, left, and race winner Charles Leclerc. AP -
Ferrari's Charles Leclerc celebrates on the podium after winning the race with second place Carlos Sainz and third place Lewis Hamilton and Ferrari team principal Mattia Binotto. Reuters -
Ferrari's Charles Leclerc celebrates on the podium with the trophy. Reuters -
Race winner Charles Leclerc and second placed Carlos Sainz on the podium. Getty -
Ferrari's Charles Leclerc celebrates with his team after winning the Bahrain Grand Prix. Reuters -
Charles Leclerc in action during the Bahrain Grand Prix. AP -
Charles Leclerc leads the pack at the start of the Formula One Grand Prix of Bahrain. EPA -
Red Bull's Mexican driver Sergio Perez is assisted by mechanics during a pit stop. AFP -
Smoke billows from AlphaTauri's French driver Pierre Gasly's car after it caught fire. AFP
