The workers "in breach of their contracts... abandoned their lawful employment at the farms to start working at the bakery," Malawi's government spokesman Moses Kunkuyu said in a statement.
Since November, hundreds of Malawians have flown to Israel as part of a government labor export program aimed at finding jobs for young people and generating desperately needed foreign exchange.
Many Malawians remain without work as the southern African nation has been gripped by an economic crisis that has seen massive government spending cuts.
Israeli farms, a valuable part of the economy, have lost thousands of laborers since the October 7 Hamas attacks triggered the war in Gaza.
Dozens of foreign workers were among about 240 people that Israel says were kidnapped in the attacks.
Malawian authorities cautioned the remaining workers, many of them young men and women, that a breach of contract would "not be tolerated."
Kunkuyu urged workers to "desist from such behavior as it puts this country into disrepute."
After being processed, four of the 12 workers arrived in Malawi on Tuesday while the other eight would arrive on Wednesday, the state said.
The labor deal has been criticized by rights group and Malawi's opposition.
In November, the country's opposition leader Kondwani Nankhumwa as "an evil transaction" because of the threat from the war that has left tens of thousands dead.
Despite opposition criticism and warnings, Malawian youth continue to express interest in pursuing opportunities presented by the deal with Israel.
Esther Dzama, a mother based in Malawi’s capital, Lilongwe, told VOA that her son is willing to work in Israeli farms.
"We expect that our son will assist in improving the agriculture sector in our area or country at large," Dzama said, adding, "he is working in a farm that grows avocado pears."
Malawi authorities insist that "the two governments will ensure the labor export to Israel operates within the prevailing regulatory frameworks."
Two weeks ago, the southern African nation opened an embassy in Tel Aviv, which its foreign minister Nancy Tembo said reaffirmed the government's commitment to "long-standing" bilateral relations between the two nations.
Tembo said the labor deal would provide 3,000 workers initially.
VOA’s Chimwemwe Padatha contributed to this report. Some information was sourced from Agence France-Presse.