Home minister Sabita Indra Reddy directed police to stop the screening till Jan 28 after some Muslim leaders called on her and demanded a ban on it.
Following this, Hyderabad police commissioner asked cinema distributors not to screen the movie at theatres in the city.
Cyberabad police commissioner, covering areas around Hyderabad, also directed theaters not to show the movie.
Officials said the orders were issued in view of the demands by Muslim organizations. Also, there were fears of law and order problems on the occasion of Milad-un-Nabi being celebrated Friday.
It was not immediately clear if the movie would be released in the rest of the state.
A day earlier, the Madras high court declined to stay Tamil Nadu government's order suspending the release of the film.
The court asked the filmmaker to postpone the release till Jan 28 so that it could view the same Jan 26.
The movie in Tamil and Telugu was scheduled for release Friday; the Hindi version, titled "Vishwaroop", is set to hit the screens Feb 1.
"Vishwaroopam" is produced and directed by Kamal Haasan, who has also acted in it.