Wildcats including endangered cheetahs are known to have been domesticated in the UAE and neighbouring Gulf countries, with some even spotted being taken outside in the middle of big cities.
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In October, one such outing with five tigers on a beach near Dubai's iconic Burj Al-Arab hotel was captured on video and went viral on social media, while others have been filmed driving around with lions.
The new law bans dealing in and ownership of "all types of wild and domesticated but dangerous animals," Gulf News daily said.
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Such animals can only be kept at zoos, wildlife parks, circuses, breading and research centres, the newspaper said.
"Anyone who takes a leopard, cheetah or any other kind of exotic animal out in public will face a jail term of up to six months and a fine" of up to 500,000 dirhams ($136,000), it added.
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Al-Ittihad, an Arabic daily, said those who use wild animals to "terrorise" others would face jail or fine of up to 700,000 dirhams.
The legislation also imposes new restrictions on traditional pets.
Dog owners are required to get permits and keep the animals on leashes in public, the reports said, adding that those who fail to obtain the licences face fines of up to 100,000 dirhams.
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