Officers found 20 people inside the bar on the Wicker on Friday, with £200 fixed penalty notices handed out to all inside.
South Yorkshire Police said it had received numerous reports about the bar breaching rules.
Both police and the council had made previous visits to the business advising it of the regulations.
Insp John Mallows, from the force's city centre neighbourhood team, said: "We want the public to know that police and local authorities will take action to address Covid-19 breaches and the warrant is one example of our partnership working to tackle repeated issues.
"Individuals who seek to ignore the rules and put both theirs and other lives at risk will face enforcement action."
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Covid-19: Sheffield shisha bar fined £2,000 for breaching rules - BBC News
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