Da Vinci's in Baylis Road has been stripped of its late night alcohol licence following a review by Lambeth's licensing committee.
Committee chair Sharon Malley, speaking at the end of a hearing at Lambeth Town Hall on Tuesday, said members believed that banning the sale of alcohol after 11pm was the only way to address the problems.
Residents had complained of disorder and debris left outside the premises.
The review application was lodged by the Metropolitan Police who described Da Vinci's as "very poorly run after midnight". By day the the space operates as a cafe.
According to the police there has been "serious crime" at the premises including assaults with glass.
Lambeth Trading Standards reported an incident of under-age sale of alcohol and a caution had been issued for spirit substitution.
Mike Tuppen, vice-chair of Octavia Hill Residents' Association, said that complaints about scenes outside Da Vinci's had been repeatedly raised at the Safer Neighbourhoods ward meeting and the South Bank Forum.
Licence holder Vacheh Andreasian repeatedly told the hearing that the customers were "cultured" people. He also alleged that some drinkers on the pavement had bought their alcoholic drink at the next door shop.
Asked how many people could be accommodated in the former shop unit, Mr Andreasian said 60. Mike Tuppen had described the space as no bigger than his front room.
Speaking afterwards, Mr Tuppen said: "Da Vinci's has been a thorn in the side of the local community for some years now and the decision by the licensing committee will be a welcome relief for local residents.
"Complaints concerning this establishment have been discussed in local forums over the past two years and the Metropolitan Police should be commended for seeking this review.
"Such establishments do not belong in Waterloo, where other licensed premises have a good relationship with the local population and act in a responsible manner."
Cllr Braithwaite said that it was important for councillors to support local businesses, particularly in the current economic climate.
"However, local residents have raised quite serious concerns to me about this establishment – as have our local police. Therefore, it is entirely appropriate that where establishments in our ward fail to act responsibly that licences are reviewed, the necessary changes made and swift action is taken by the council."
Mr Andreasian was unavailable for comment on Wednesday morning. Last month he told us that the police's claims about his business were "absolute rubbish".
For the latest local news and events direct to your inbox every Monday, you need our weekly email newsletter SE1 Direct.
7,000+ locals read it every week. Can you afford to miss out?
Read the latest issue before signing up