Smoking in public places is also outlawed, but people can still light up in their homes.

Bhutan's trade and industry ministry issued a notice giving shops, hotels, restaurants and bars until December 17 to dispose of tobacco stocks, the kuenselonline.com website said.

The notice extends to the capital Thimphu a ban on tobacco sales that has been enforced in 18 of the pristine country's 20 districts since summer.

Bhutan's national assembly voted in July to ban tobacco sales nationwide and levy a 100 percent tax on tobacco products brought into the country for personal consumption.

Cities such as New York ban smoking in public places and several countries including India ban tobacco advertising.

Bhutan, a Mahayana Buddhist nation of 734,000 people nestled between India and China, proclaims a development goal of "gross national happiness."

It is the first nation to ban tobacco sales outright, according to the website of the anti-smoking group, Action on Smoking and Health.

"We had declared in the World Health Assembly that we would be the first country in the world to be smoke-free," Sangay Thinley, secretary in Bhutan's health ministry told AFP last month.

"We hope with the initiative others would also follow. The main intention is to protect the health of the people," he said.

Anyone caught selling tobacco in Bhutan faces a 225 dollar fine, a hefty sum in a country where the poverty line is set at around 16 dollars a month.

Only about seven percent of the population chew or smoke tobacco.