Gov. David Paterson and the State Liquor Authority announced the agreement Sunday with Chicago-based Phusion Projects, which makes the drink Four Loko, and with the state's largest beer distributors to stop selling caffeinated alcoholic beverages.
"New Yorkers deserve to know that the beverages they buy are safe for consumption," Paterson said.
The company agreed to stop shipping the drinks by Nov. 19. Distributors have until Dec. 10 to finish out their inventory. The popular drinks have been banned in Washington, Michigan, Utah and Oklahoma.
Four Loko comes in several varieties, including fruit punch and blue raspberry. A 23.5-ounce can sells for about $2.50 and has an alcohol content of 12 percent, comparable to four beers, according to the company's website.
College students have been hospitalized after drinking the beverages, including in New Jersey, where one school banned them on campus.
Phusion also agreed to fund alcohol awareness programs as part of the agreement. In a statement, co-founder Jaisen Freeman said the company believes that mixing alcohol and caffeine is safe, but the company wanted "to be known for cooperation and collaboration, not controversy."
"We were the first company to take this voluntary step," he said. "And we think it shows that we are not turning a deaf ear to what's going on: that a select few have chosen to abuse our products, drink them while underage or break the law and sell them to minors."
New York's liquor regulators said there was insufficient evidence to show that the products were safe.
"We have an obligation to keep products that are potentially hazardous off the shelves, and there is simply not enough research to show that these products are safe," said Dennis Rosen, chairman of the state Liquor Authority, in a statement.
Steve Harris, president of the New York State Beer Wholesalers Association, said some of its members have agreed to stop selling the drinks and the association's executive committee is recommending that the entire membership follow suit.
"We are pleased to be a partner in the process of resolving the tangled issues that have surrounded these products," he said.
The federal Food and Drug Administration said in late 2009 that it had notified at least 30 manufacturers of caffeinated alcoholic drinks that they were reviewing the products' safety.