"Security forces decided to close the paper following an erroneous front-page report published on Jan. 28, for which the paper issued a public apology," Wol Deng Atak, chief editor of The National Mirror, told The Anadolu Agency.
On Jan. 28, the paper mistakenly reported that rebel forces had forced government troops out of Al-Rank city in Upper Nile State.
The National Mirror's editorial board said Wednesday that security forces had confiscated the paper's Wednesday edition and had forbidden the editors from publishing further editions.
The South Sudanese government has yet to comment on the incident.
"The newspaper formally apologized to the South Sudanese armed forces in its Jan. 29 issue, which included an official response denying the earlier report," Atak said.
"The newspaper is simply carrying out its journalistic duties in good faith vis-à-vis the government," he added.
Earlier this month, South Sudanese President Salva Kiir and rebel leader Riek Machar signed a power-sharing deal in Addis Ababa in a bid to end their year-long conflict.
South Sudan, which gained independence from Sudan in 2011, has been shaken by violence since late 2013, when Kiir accused Machar, his sacked vice-president, of leading a failed coup attempt against his regime.
Tens of thousands have reportedly been killed in the crisis, with some two million uprooted from their homes and hundreds of thousands now seeking shelter in refugee camps across the country, according to recent UN estimates.