"The Diyala command gave the militiamen special authorisation [to carry arms]," he said. "Those authorisations expired and were withdrawn by the command."
Chalabi said the expiration issue only applied to Sahwa members in Diyala.
Leaders of the councils, which started in 2006 and helped US-led forces to fight al-Qaeda, responded angrily to the ban.
They threatened to stop co-operating with security forces in Diyala, a mostly Sunni province and one of the most volatile in Iraq.
Khalid al-Luhaibi, head of the Sahwa movement in Diyala, said the order withdrawing weapons permits must be cancelled. He threatened to withdraw his men from checkpoints around the province.
"These weapons are necessary to protect ourselves and to protect the regions under our control," he said. "We will be forced to withdraw to avoid being an easy target for Al-Qaeda if this decision is upheld."
But Luhaibi later denied those reports: He told Al Jazeera's Omar al-Saleh in Baghdad that he "didn't threaten to stop cooperating," and said his men have a "good relation[ship]" with the Iraqi government.
The Awakening Councils formed after tribal leaders decided to join US and Iraqi forces in fighting al-Qaeda and other groups opposed to the government.
Iraqi leaders promised to give government jobs to some 90,000 Sahwa members, but only about 42,000 of the fighters have been offered jobs, according to government officials.
Thousands of other Sahwa fighters were asked to stay with their neighbourhood security patrols through Iraq's March 7 parliamentary election and until a new government is formed.
The vote produced no clear winner. A cross-sectarian coalition led by former prime minister Iyad Allawi won a narrow victory with strong support from minority Sunnis, but no bloc won enough seats to form a majority government.
Since the election, Iraq's two major Shia coalitions have announced plans to form the largest bloc in parliament. Allawi in turn has warned that a Shia alliance that attempted to exclude his bloc from government could trigger renewed violence.
The Awakening Councils were credited with helping to significantly cut violence since the worst of the sectarian bloodshed in 2006-07, when tens of thousands of people were killed.
Diyala, a mixed province with a Sunni majority just east of Baghdad, has seen more violence in recent months than other areas of Iraq.
On May 12, a minivan packed with explosives blew up at a crowded market in the town of Khalis, killing at least 30 people and wounding 80 others.
Before joining the fight against al-Qaeda, members of the Awakening Councils were accused of killing American and Iraqi soldiers. Some of their former leaders and fighters were arrested by Iraqi security forces to face those accusations, forcing others into hiding.
Sahwa members have also been the targets of a recent campaign of assassinations and bombings in which more than 100 people have died.