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Liquor authority spokesman William Crowley said retailers will be given "a reasonable amount of time" to sell off their remaining inventory.
The makers of Four Loko said they are preparing to introduce non-caffeinated versions of the product, which currently holds the alcohol content of three cans of beer and the same amount of caffeine as three cups of coffee.
Mo Alfaki, owner of the West Side Deli in New York, said the announcement of the ban was a boon for Four Loko sales.
"People are coming in, they are curious about the drink," Alfaki said. "I even bought a few different flavors, but I have not drank them. I'm afraid. I hear it makes people crazy."