President Uhuru Kenyatta has assented to the Computer and Cybercrimes Bill, 2017.
The new law imposes hefty fines and long prison terms for cyber bullies and fake news dealers.
It also targets journalists, media houses, social media users, bloggers and other internet users.
The assent comes amid calls for the president to revert the law back to Parliament to ensure its provisions are constitutional and do not violate the right to media freedom and expression.
Last week, the Committee to Protect Journalists (CPJ) urged President Kenyatta not to assent to the bill, saying it stifles press freedom.
"Kenyan legislatures have passed a wide ranging bill that will criminalise free speech with journalist and bloggers likely to be the first victims if signed into law," said CPJ's Africa Coordinator Angela Quintal in New York.
According to clause 12 of the law, publishing of a false or fictitious information will attract a Sh5 million fine or a two-year jail term.
A clause introduced in the bill by the National Assembly Majority Leader Aden Duale extends the jail term to 10 years if the false information is calculated to cause panic chaos or violence.
Former Law Society of Kenya chief executive Apollo Mboya said the context of 'false information' will give the authorities a free opportunity to gag the media.