The decision follows the release of a report by an inter-ministerial panel that determined it is impossible to block sacrilegious content on YouTube, Pakistan's Geo News reported.
The report to the National Assembly's standing committee on Information Technology also said YouTube was not willing to cooperate with the government of Pakistan.
Pakistan pulled the plug on YouTube following violent protests against an anti-Islam video that was posted on the website.
The Pakistan Telecommunications Authority has blocked as many as 682,000 websites that carry what it considers to be blasphemous content.
The authority said YouTube officials are expected to visit Pakistan later this month to discuss the matter.