The NGOs Coordination Board has moved to de-register the Africa Centre for Open Governance (Africog), an open governance non-profit, for alleged contravention of the law in its operations.
The State agency in a letter issued today also called for the arrest of the lobby's directors and for the Central bank (CBK) to freeze its bank accounts until further notice.
"The board has noted that Africog is not registered under the NGO's Coordination Act 1990 as required by law...Africog continues to operate as a charitable organization in contravention of Section 22(1) which according to the Act is punishable by law," a letter to the Directorate of Criminal Investigations (DCI) signed by executive director Fazul Mahamed says.
Africog had in 2013 filed one of two landmark petitions challenging the election of President Uhuru Kenyatta, with the other being filed by opposition leader Raila Odinga.
The Supreme Court, led by former Chief Justice Willy Mutunga, dismissed both petitions after unanimously agreeing that Mr Kenyatta and his deputy-elect William Ruto were validly elected in the March 4th polls.
Africog director Gladwell Otieno had also moved to court last month seeking to have the Independent Electoral and Boundaries Commission (IEBC) publish the voter register for public inspection last week's election.
Justice George Odunga however declined to grant the application, saying it would interfere with the the electoral process.
The move comes just a day after another NGO, the Kenya Human Rights Commission (KHRC), was deregistered for alleged tax evasion, illegal bank accounts and illegal hiring of expatriates.
KHRC was was founded and registered in 1994 by five Kenyans while in exile, namely former CJ Willy Mutunga, Prof Makau Mutua, civil rights veteran Maina Kiai, politician Kiraitu Murungi and Peter Kareithi.
The State also accused KHRC of filing false returns to the Kenya Revenue Authority (KRA).
Africog and KHRC are the latest casualties in a crackdown of NGOs that have been banned over operational issues.
Last week, British charity International NGO Safety Organisation (INSO) got a reprieve after High Court judge George Odunga ruled that the NGO Co-ordination Board has no power to suspend operating licences.
Kenya had revoked INSO's permit in 2015 after the government accused it of sharing sensitive national security data with Britain and Switzerland.
Like the KHRC, it was also accused of hiring foreigners in Kenya without work permits.
The Fazul-led agency has since 2015 attempted to shut down 957 organisations it singled out for money laundering, funding terrorism and misappropriating donor funds.
The NGOs Coordination Board said at the time that they had failed to account for Sh23 billion donor cash received out of Sh140 billion.
Mr Mahamed said NGOs complying with the law would not face deregistration.