The chief minister made this announcement at an event where BJP's Madhya Pradesh chief Nandkumar Singh Chauhan called Bollywood director Sanjay Leela Bhansali a "sinner" and alleged that in the movie 'Padmavati', history had been tampered with for the sake of money.
In his speech, the chief minister said that the movie would not be allowed to be screened if it "distorted facts" or breached the honour of the legendary Rajput queen.
Addressing members of the Rajput community at his residence in Bhopal, Mr Chouhan also announced the institution of the "Rashtramata Padmavati Award" for a person "doing outstanding work for protecting the honour of women" and the "Maharana Pratap Award" for gallantry. He, however, did not elaborate.
"We will not tolerate any distortion of historical facts. The entire country is speaking in one voice that historical facts were distorted (in the movie)," he said. If there are scenes breaching the honour of queen Padmavati, the movie will not be allowed to be exhibited in Madhya Pradesh, Mr Chouhan said.
He said that queen Padmavati was a "true reflection of the Indian woman".
"We have been studying about the rare sacrifice and dedication of queen Padmavati since our childhood," he said referring to the legend that the queen had committed "jauhar" (self immolation) before Chittor could be captured by Alauddin Khalji in 13th-14th century.
He said a memorial of the queen would be built at a site in the state capital, where a memorial for the country's brave soldiers has been proposed.
In his address, Madhya Pradesh BJP president Nandkumar Singh Chauhan dubbed Sanjay Leela Bhansali a "sinner".
Meanwhile, the Congress termed the Chief Minister's announcement against the screening of "Padmavati", as "propaganda" for polarisation of votes in the next month's Gujarat elections.
"This is ridiculous. Shivraj Chouhan made this announcement even before the movie was cleared by the censor board. This is propaganda being staged in the view of ensuing Gujarat polls with an aim to polarise voters," alleged Leader of Opposition Ajay Singh.
Criticising Mr Chouhan for announcing "Rashtramata Padmavati award", Mr Singh claimed that the chief minister has "miserably failed" in protecting the honour of women in Madhya Pradesh. He should pay attention to checking the crime against women, the Congress leader said.
Earlier in the day, delegations of the Rajput community arrived from different parts of Madhya Pradesh and submitted a memorandum to the chief minister demanding a ban on the release of 'Padmavati'.
On Sunday night, activists of the Karni Sena protested outside a cinema hall in Anjad town in Barwani district for playing the trailer of the controversial movie.
Dharmendra Jain, the owner of Virendra Talkies where the incident occurred, said the trailer of the film will not be shown again.