The Swiss government said 53.4 percent of those voting on Sunday were against funding the procurement, which would have cost $3.5 billion.
"The people have spoken," said Susanne Leutenegger Oberholzer, a Social Democrat member of parliament. "We surely don't have the money for such unnecessary acquisitions."
The Swiss air Force currently flies the F/A-18, due for retirement in 2025. The Federal Council planned to replace the U.S.-built planes with 22 Gripens.
"This decision has the effect of creating security gaps," said Federal Councilor and defense minister, Ueli Maurer. "We will make every effort to address these gaps in time in this difficult context.
"During the coming months, we must consider different options to find the best solution for our military readiness."
The Gripen is a multi-role fighter with a maximum speed of 1,372 miles per hour at high altitude and a combat range of 497 miles. The Czech Republic last week renewed its lease of Gripens and Brazil has ordered the aircraft. Gripen is operational in Sweden, South Africa, Czech Republic, Hungary and Thailand.
Swiss opponents to their government's Gripen deal argued the money spent to procure the plans could better be spent on other things.
Saab would not comment directly Monday on the vote but noted that under an industrial participation program, over 500 contracts with 125 Swiss businesses had been arranged since 2011, when Switzerland's government had selected the Gripen in an aircraft procurement competition. Most of the contracts were between the businesses and Saab's partners and suppliers.
"This shows very clearly that there are strong and long-lasting relationships between Sweden and Switzerland," Saab said. "Saab will continue working with Swiss companies and contracts placed will be honored, subject to their terms and conditions."