Public Safety Minister Robert Trevors introduced legislation last week that would have removed a restriction preventing novice motorists from driving between midnight and 5 a.m.
Trevors initially defended the legislation, saying it was needed to remove a restriction that is inconvenient for young drivers, especially in rural regions.
But Trevors reversed course Thursday, saying the government would not proceed with the bill after hearing concerns about it.
"Since introducing new legislation regarding licensing, we have heard additional concerns. People feel very strongly about it at both ends of the spectrum," he said in a statement.
"But safety must be our top priority. We have listened. In light of the concerns that have been expressed, we will not proceed further with Bill 5 at this time."
The legislation sparked uproar from MADD Canada and the Canadian Automobile Association, who said it would have put driver safety at risk.
The two groups said there is no science to support the elimination of the overnight driving restriction and that it would have gone against restrictions that are in place in most of the country.
The Canadian Automobile Association issued a statement Thursday applauding the government for withdrawing its legislation.
"This move will continue to ensure that newly licensed drivers gain the necessary experience to safely drive in nighttime conditions," said Gary Howard of the association's Atlantic wing.
Former Liberal premier Shawn Graham had also spoke out against the Progressive Conservative government's bill, saying half of all teenaged motor vehicle deaths occur between 9 p.m. and 6 a.m.