Sheikh Mohammed Tantawi was reportedly angered during a tour of a Cairo school when he saw a girl wearing a niqab, the full veil worn by some devout Muslim women which covers the entire body except for the eyes.
Sheikh Tantawi, regarded by many as Egypt's Imam and Sunni Islam's foremost spiritual authority, asked the teenage girl to remove her veil saying: "The niqab is a tradition, it has no connection with religion."
The imam instructed the girl, a pupil at a secondary school in Cairo's Madinet Nasr suburb, never to wear the niqab again and promised to issue a fatwa, or religious edict, against its use in schools. The ruling will not affect use of the hijab, the Islamic headscarf worn by most Muslim women in Egypt.
Although definitions vary, the niqab is generally distinct from the burka, a garment which covers the entire body and allows only a mesh material in front of the eyes.
Shekih Tantawi's order is likely to resonate throughout the Islamic world even though, ironically, the schoolgirl had only worn the niqab in honour of his visit to the school.
Following the imam's lead, Egypt's minister of higher education is to ban female undergraduates from wearing the niqab from the country's public universities, Cairo's Al-Masri Al-Yom newspaper reported.
The Egyptian government has become increasingly uneasy about the growing popularity of the niqab, seeing it as another manifestation of the religious puritanism it has long sought to suppress.
Although the Koran does not require women to cover their faces, Sheikh Tantawi's edict is likely to prove unpopular among fundamentalist Muslims. One popular Saudi cleric has already argued that the niqab is not conservative enough and has called on devout women to ensure they only reveal one eye in public.
While undoubtedly influential, Sheikh Tantawi has plenty of detractors who deplore his moderation in many fields.
They have criticised him for shaking hands with Shimon Peres, the Israeli president, backing France's ban on wearing the hijab in schools and issuing a fatwa allowing abortion for women who became pregnant through rape.