The Swiss government suspended the approvals process for three new nuclear power stations in March pending a review into safety after the disaster at Japan's Fukushima plant.
Last weekend 20,000 people rallied against nuclear power -- the largest demonstration of its kind since the 1980s.
On Thursday, the Swiss cabinet agreed to build no more nuclear reactors once the current power plants reach the end of their lifespan, with the oldest set to come offline in 2019, while the newest would remain in operation until 2034.
"Existing nuclear power plants will be closed at the end of their operative life and not replaced by new nuclear power plants," the government said in a statement.
The decision is likely to please business groups who had warned that a premature shut down of Switzerland's nuclear reactors could lead to higher electricity costs and negatively impact the country's energy-hungry manufacturing sector.
But the delay will anger the Greens and the Social Democrats (SP) who had called for nuclear reactors to be closed earlier.
Swiss utility companies Axpo, Alpiq and BKW had expressed an interest in building new nuclear plants and decisions on sites had been expected in mid-2012.
Switzerland plays a pivotal role in central European power markets. Its five nuclear plants -- which produces 40 percent of the Alpine state's electricity -- serves as a basis while its big hydropower sector supplies neighbors in years with high water supply but necessitates imports in dry years.
Neighboring Germany is due to vote on its expected exit from nuclear power on June 6 and is expected to back a shut down of all its nuclear reactors within a decade.
Photo by HeyRocker/flickr/Creative CommonsReprinted with permission from Reuters