The decision was taken at a meeting of the Cabinet presided over by Prime Minister Narendra Modi as the bill passed by the Lower House and is pending before the Rajya Sabha has no chance of being cleared before April 5.
Now the recommendation will go to President Pranab Mukherjee, who is expected to re-issue the ordinance in time before April 5 when the previous ordinance will lapse.
Sources said that it will be a new ordinance that will incorporate all the nine amendments brought in Lok Sabha saying it cannot be different from the bill already pending.
The pending measure, titled Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, that was passed in Lok Sabha sought to replace the ordinance that was promulgated in December.
The ordinance should have been cleared by Parliament before April 5 if it was to subsist. But the government faced a hurdle in Rajya Sabha, where it could not get the bill to replace it cleared because of lack of numbers.
The Opposition was not in a mood to oblige the government and in fact mounted a strong campaign against it. Led by Sonia Gandhi, the Opposition parties demanded the passage of the original land bill that was passed during the UPA regime.
Brushing aside opposition to the ordinance, the Cabinet Committee on Parliamentary Affairs on Friday decided to prorogue the current session of Rajya Sabha paving the way for re-issuing it. On Saturday, the President prorogued the House.
Under the Constitution at least one of the Houses has to be prorogued for Government to issue an ordinance.
Parliament is currently on a month-long recess after the Budget session started on February 23.
The land ordinance was among the six executive orders issued by the government in the inter session period. While five of them were cleared by Parliament, the land measure is stuck.
Once it is re-promulgated, it will be the eleventh ordinance to be issued by the Modi government.