Production at its Pouyuen Vietnam business in Ho Chi Minh City, the epicentre of the country's worst coronavirus outbreak, will be suspended for 10 days, the health ministry said in a statement.
After successfully containing the disease for much of the pandemic, Vietnam has faced a more stubborn outbreak since late April, with daily infections climbing to record levels.
Companies in Vietnam's business hub and its neighbouring industrial provinces have been struggling to keep running, after strict movement curbs were imposed across much of the area.
Pouyuen Vietnam, the largest employer in the city with 56,000 workers, could not arrange for its workers to sleep at the site as required by authorities to allow the business to remain open, the ministry said.
Pou Chen, which manufactures footwear for companies such as Nike and Adidas, did not immediately respond to an email seeking comment.
In April last year, Pouyuen Vietnam was also ordered to suspend its production for two days after failing to meet local rules on social distancing.
Earlier this week, state media said city authorities also ordered 29 companies in the Tan Thuan Export Processing Zone, an industrial park, to suspend production due to the outbreak.
At the neighbouring Saigon Hi-Tech Park, which houses international companies, more than 700 infections had been detected in recent days, state media reported.
City authorities had ordered companies to shut units with infected workers, the Thanh Nien newspaper reported.
"The highest objective at the moment is to contain the outbreak," the paper cited the vice chairwoman of the park's management board Le Bich Loan as saying.
In May, the outbreak also forced companies in the northern industrial provinces of Bac Ninh and Bac Giang to scale down production, including Samsung Electronics and Foxconn.
Despite the latest outbreak, Vietnam has recorded far lower caseloads that many other countries with 35,409 infections in total and 130 deaths.
(Editing by Ed Davies)