The government of Sindh province imposed the 30-day ban after several thousand MQM supporters protested against Khan's comments, fearing that a visit by the former cricketer could affect law and order, police said.
The MQM is a member of the ruling coalition in both the central and Sindh provincial governments, and represents Urdu speakers who migrated to Pakistan from northern India following the partition of the sub-continent in 1947.
The clashes in Karachi between pro-government and opposition party workers on May 12 broke out during a visit by Iftikhar Chaudhry, the suspended chief justice, to address lawyers.
"The decision was taken in view of his remarks against the coalition party and reaction by party workers," Azhar Farooqi, city police chief, said.
"It would be in the best interests of Pakistan for Musharraf to step down"
Jim ibarra, Cyberjaya, Malaysia
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"If he visits Karachi, there are chances of disturbance so we'll not let him stay here."
Khan said the ban was illegal and motivated by his threat to pursue a legal case against Altaf Hussain in London.
"This is MQM's fascist tactics," he said. "They are trying to scare me".
"Altaf Hussain treats Karachi as his private fiefdom. He is acting like a mafia don, and since I announced my intention to take him to court he has gone berserk."
Meanwhile, an organisation linked to the MQM has declared 12 journalists "enemies" apparently because of their coverage of the violence in Karachi, a media rights group said.
The New York-based Committee to Protect Journalists said that the Karachi-based Muhajir Rabita Council has "listed 12 journalists by name and identified them as enemies".
A politiican from the MQM denied the group was involved in threatening journalists.
"Threatening anyone is not our policy," Haider Rizvi, an MQM member of the National Assembly, or lower house of parliament, said.
The MQM supports attempts by Pervez Musharraf, the president, to replace the chief justice, while opposition parties and lawyers have seized on the issue criticising it as an attack on the independence of the judiciary.