The education ministry gave the order following a High Court verdict, the government said in a statement on Tuesday.
All the 95 private universities approved by the government are engaged in academic activities except five.
The government launched a judicial investigation into allegations of owner crisis, irregularities, corruption and ‘business in the name of admission’ in Darul Ihsan University in October 2010.
The lone member of the investigation committee, retired judge Kazi Ebadul Haque, submitted the report to the education ministry in March 2013.
Haque recommended shutting the university down.
Following his recommendation, the parliamentary committee on the education ministry requested the president, who is the ex officio chancellor, to take measures in line with the laws for private universities.
In September 2014, the University Grants Commission alerted students and guardians about admission into the university and 48 outer campuses of other private universities.
The education ministry took steps against Darul Ihsan University for alleged irregularities and corruption, but the university had continued operations following a High Court order staying the government action.
Now the ministry has closed the university as the High Court recently issued the verdict in favour of the government, an official of the ministry said.