Dutch police are investigating a murder case in which a severed human head was discovered at the entrance of a shisha bar in Amsterdam.

Eberhard van der Laan, mayor of the Dutch capital, ordered the notorious Fayrouz Lounge to close after the gruesome find on Wednesday, which was linked to a drug war between rival gangs.

A passer-by reported the scene to police, who linked it to the discovery of a decapitated body in a burned-out car elsewhere in the city on Monday.

Police said the body belonged to 23-year-old Amsterdam resident Nabil Amzieb, who was known to the authorities.

"A police probe later confirmed the head belonged to the body," they said in a statement.

Police arriving at Wednesday's crime scene reportedly ordered witnesses to delete photos of the head which they took with their phones.

"It seemed as if the head was placed in a way that made it look like it was staring through the front window of the lounge, as some sort of warning," a witness told Dutch daily Het Parool.

The shisha bar is said to be a gathering spot for criminals involved in the so-called "Mocro-war", a power struggle mainly between Dutch-Moroccan gangs in the city.

The severed head most likely represented a "new phase" in the gang war, which has seen several others murdered in Amsterdam, including one man who was killed after visiting the same bar, Dutch media reports said.

Moroccans are the third largest group of non-western immigrants in the Netherlands, after people from the former Dutch colony of Indonesia and Turks.