Police have been told to confiscate all copies of Wild Wind, after the Home Ministry declared its publication, sale and distribution illegal.
It is the third time in a decade that one of Ms Nasreen's works has fallen foul of the country's laws.
The authorities say the book, written in Bengali, contains anti-Islamic remarks, which are likely to anger Bangladesh's Muslim majority and lead to religious tensions.
Ms Nasreen told the BBC Bengali service there was no freedom of expression in the country.
"It is a democratic country but... there is no real democracy in Bangladesh.
"The political parties use religion for their own interests and whenever they find any criticism about religion, they can't tolerate it, so they ban the book."
Wild Wind is the sequel to My Girlhood, published in 1999, which was also banned in Bangladesh for blasphemy.
Death threats
Ms Nasreen, a doctor-turned-writer, rose to prominence in 1993 after her first book, Shame, ran into similar problems.
She fled the country shortly afterwards because Muslim extremists put a price on her head.
They were incensed at comments she is said to have made to an Indian newspaper calling for changes in the Koran to give women more rights.
Ms Nasreen denies making the remarks.
She has spent most of her exile in Sweden and France, but is now thought to be seeking political asylum in Calcutta from the Indian authorities.
Last year, her novel French Lover did appear in Bangladeshi bookstores - her first publishing victory in the country since she left.