Service in the armed forces was mandatory in Iraq from 1935 to 2003, when a US-led invasion toppled former dictator Saddam Hussein, disbanding the army and security services.
In August last year, the previous government submitted a bill to reinstate conscription.
Iraq several months later elected a new parliament, but Sudani's government was only approved last month after a year of political paralysis.
Several pieces of legislation including the conscription proposal "have been withdrawn... as they do not correspond with the government's direction", Sudani said Tuesday.
The bill proposed enlisting young men aged 18 to 35 for terms of between three and 18 months, depending on their education level.
There was widespread opposition among Iraqis to the plan, which parliamentary sources said lawmakers had been unlikely to approve.
In a country where nearly four out of 10 young people are unemployed, former electricity minister Louai al-Khatib had suggested it was more important to "create centres for professional training" rather than reinstate conscription.
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