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The ban goes into effect 2023 for hotels with more than 50 rooms and 2024 for those with fewer than 50.
If a hotel does not abide by the new rules, the company can be fined $500 for the first offense and $2,000 subsequent ones, the AP reported.
Some hotels have already pledged to remove the plastic bottles from all their rooms.
Marriott International will stop using the toiletries by next December. IHG, owners of Holiday Inn and Kimpton, will stop using about 200 million by 2021, the AP reported.
The banning of the small plastic bottles is the latest step state officials are taking to limit how much plastic is used. California has banned grocery stores from giving plastic shopping bags without charging a fee and plastic straws are only given with drinks when requested.
California is not alone when it comes to banning plastic products.
New York lawmakers are also trying to put an end to the hotel amenities.
New York Sen. Todd Kaminsky has proposed getting rid of the small shampoo bottles and other single-use products in hotel bathrooms. He claims that New York City throws away about 27 million small plastic hotel toiletry bottles each year, the AP reported.
The state legislature is expected to debate the bill when they reconvene in January.