It comes as at least five confirmed cases of coronavirus were linked to The Tipu Sultan restaurant .
New powers from Government means that Birmingham City Council and the police can investigate reports of businesses which are failing to comply with Covid-secure risk assessments.
If necessary, they can reduce the numbers of people present, restrict numbers on areas of the premises or close the premises.
The Tipu Sultan was issued with a direction order on Thursday, after officers responded to about 25 reports of events being held at the premises with significantly more people than the Government guidance of a maximum of 30 in any gathering.
The inspection also found that safety measures detailed within the restaurant's risk assessment had not been implemented all of the time, and that social distancing in the queue for entry and in waiting areas of the restaurant had not been maintained or controlled in an acceptable manner.
More Covid-19 coverage:
Councillor Ian Ward, leader of Birmingham City Council, said: "The hospitality sector in Birmingham is one of the best in the country. For it to stay that way we need to feel safe to go out and enjoy ourselves in the fantastic restaurants and bars we have.
“Most businesses are complying with the Covid regulations, however those that are not complying are helping the virus to spread and putting people’s lives in danger.
“By enhancing enforcement, we are ensuring the safety of our citizens and giving businesses a final chance to do the right thing and implement measures that protect their customers and their staff.”
The direction order came into effect on Saturday, and stipulates that the restaurant must restrict entry into the premises – not allowing bookings of more than 30 people, ensuring large parties are given a separate dining area, implement a booking system to prevent people from queueing outside, and use the booking system to allow time for tables to be thoroughly cleaned.
Head of environmental health, Mark Croxford, added: “Numerous reports have been made to the council, the police and local councillors that events are being held at Tipu Sultan with significantly more people than the Government guidance of a maximum of 30 in any one party.
"As a result, at least five confirmed cases of Coronavirus have been linked to the premises over a period of four weeks. A direction order was necessary in order to protect against the spread of coronavirus.
"I look forward to the Tipu Sultan making the required changes so that their staff and customers can have a more positive, safer experience.”