Municipal Affairs Minister Mark Furey says the province would rather work with municipalities and villages in finding sustainable solutions for their governance structure.
Furey says the decision follows a meeting this week with representatives of the Association of Nova Scotia Villages to discuss a draft fiscal review report that was released last fall.
The report said incorporated villages should be phased out, while existing villages should be given the opportunity to apply for town status, merge with an adjacent town, or dissolve into their encompassing rural municipality as they see fit.
The report made 41 recommendations in all.
A steering committee composed of elected municipal officials and deputy ministers is analyzing feedback from consultations before submitting a final report to the province.