APM Producciones said in a statement that the project had all necessary permits and affected only 4.4 hectares (9 acres). It said the final project would include building housing and planting trees and grape vines.
The company claimed a concert planned for the weekend would go ahead.
But the Environment Department said the developers did not have a permit to change the land use of the property.
The area between Ensenada and the border city of Tijuana has become a victim of its own success as Mexico’s answer to California’s prized Napa Valley. Wine tours, hotels, luxury apartments and entertainment venues threaten the area’s already-scarce water, thin soil and relative calm.
A bit dustier and rougher around the edges than Napa Valley, the Baja California wine country has vineyards clustered along a main highway known as the Ruta del Vino.
The fast-growing wine mecca just two hours south of San Diego is home to hip boutique hotels, an impressive culinary scene and more than 100 wineries.