It suggested that spraying the mask would create a preventive barrier with a lab-tested product "absolutely safe for human contact" and "approved to kill 99.9 per cent of Covid-19 germs within 30 seconds for up to 30 days".
The ad said Nano Silver was currently the "most recommended sanitiser in the market".
The authority's complaints board found the advertisement made therapeutic claims in breach of the Therapeutic and Health Advertising Code and which had not been adequately substantiated.
The complainant said none of the advertiser's accreditations showed proof that the product's use on face masks was effective against Covid-19.
It also stated that the product was tested to kill Covid-19 germs, but the research related to the use of a surrogate virus (MHV1) in the testing and not Covid-19.
The complainant said in submissions to the ASA that they had asked many times for documentation to prove the claim, to the point the company no longer replied, other than to refer back to current accreditations.
The complainant said searches showed that silver nanoparticles the advertiser said were the main ingredients in the product, may cause harm and irritation to people.
"So, encouraging use on masks may be dangerous as well," the complainant said.
The board said in its decision that information provided by the advertiser, in support of the claims about the efficacy of the product, related to different circumstances.
The test results related to the hand sanitiser itself and its use as a steriliser on hard surfaces, not to its use as a spray on face masks.
The board said neither did the advertiser provide any substantiation for the claim that "Nano Silver is currently the most recommended sanitiser in the market".
The advertiser defended the advertisement and said the product, made from water and silver ions, was "completely safe".
The advertiser said surrogate viruses were used to test the efficacy of the product, in accordance with guidelines set by Therapeutic Goods Association Australia, and claimed it was approved by the Food and Drug Administration [FDA] and Ministry for Primary Industries [MPI].
The ASA Secretariat requested information from Medsafe about the use of surrogate viruses in the circumstances described by the advertiser.
Medsafe responded that a mask would be a medical device if used to prevent infection, but a substance sold separately to be sprayed on the mask was neither a medicine nor a medical device in this situation.
Medsafe also understood that the surrogate virus used in the testing was a permitted organism for a label claim of efficacy against Covid-19 for products that were either hard surface disinfectants, or disinfectants that were medical devices, but not a mask.
The complaints board said the advertisement was in breach of the Therapeutic and Health Code because only medicines able to be distributed in New Zealand, or medical devices could claim to have a therapeutic purpose in advertisements.
It said according to the information provided by Medsafe, the sanitiser in question was neither a medicine nor a medical device in this situation.