The measure allows the government to bar stories from being broadcast if they are deemed harmful to national security and to raid offices and monitor telephone calls, the BBC reported. Companies are banned from owning both radio or television stations and print publications.
Kibaki said in a statement that the Kenyan Communications Amendment Bill will "safeguard our culture, moral values and nationhood."
The government has a recent history of attempting to control the media. In 2006, The Standard newspaper and KTN-TV were raided by masked police officers shortly after publication of stories on official corruption. The newspaper and its sister TV station were accused of inciting ethnic hatred.
During the violence that followed the 2007 election, the government banned live broadcasts and call-in shows.
"It is just paradoxical that he himself, being a key beneficiary of press freedom, should now be signing a law that muzzles the press," said Martin Kafafa, vice-chairman of the Kenyan Media Owners' Association, talking about Kibaki.