The proposal would target johns, not prostitutes, The Copenhagen Post reported Monday.
A Justice Ministry committee that determines the legality and feasibility of proposed legislation has rejected the proposal. The coalition government is expected to go along with the recommendation.
Pernille Vigso Bagge, the equality spokesperson for coalition member Socialistisk Folkeparti, said Parliament would probably look for a "milder solution."
Rasmus Horn Langhoff, the equality spokesman for coalition party Socialdemokratern, said both parties were in favor of banning sex purchases. His party said in 2009 it was in favor banning the sex trade.
Justice Minister Morten Bodskov is against criminalizing prostitution.
Manu Sareen, the government's gender equality minister, said during last year's election he wanted to ban the sex trade because it exploited women, but last month said he was not sure a ban was the best solution.
The government is expected to offer counseling and other support programs to prostitutes and trafficked women if a ban cannot be passed.