Maharashtra Deputy Chief Minister, R.R. Patil, played a main role in the ban, the BBC reports.
He said the dance bars -- where fully clothed women dance for money -- were a cause of crime and "a bad influence on young men."
Opponents of the ban said it created more than 100,000 jobless women, some of whom turned to prostitution for money.
The state government can appeal the ruling to the Supreme Court within eight weeks.