The Interior Ministry says it will ditch plans to move to the Finance Ministry building on Suur-Ameerika street, along with the ministries of economy, justice and social affairs.
The Justice Ministry will replace the Interior Ministry in the building according to new plans, reported Eesti Päevaleht.
A spokeswoman said working conditions would have declined for the Interior Ministry's 261 employees, had they gone ahead with the move.
Another factor was that the Interior Ministry's Pikk tänav building in the Old Town, across from the former KGB headquarters, was renovated just a few years ago, rendering the plan financially unsound.
Officials have said the updates, yet to begin, after which the Finance Ministry's Soviet edifice would house five of Estonia's 11 ministries, could be completed in 2016.