It had proposed a six-month jail term, or a $63 fine, for eligible voters who failed to cast their ballots.
The bill sailed through its second reading 10 days but a government spokesperson said it decided to withdraw it follow consultations with a "broad spectrum of stakeholders".
In recent years, Nigerians have been increasingly reluctant to go vote.
Turnout in national elections has steadily declined, with the 2023 presidential poll recording a 27 per cent turnout, the lowest since the country’s 1999 return to democratic rule.
The House of Representatives speaker who co-sponsored the bill said it was introduced with the best of intentions.
Abbas Tajudeen said he had hoped it would bolster civic engagement and strengthen Nigeria’s democracy.
But some rights groups described the move as both draconian and unconstitutional.
They said the moment citizens are forced to vote, the concept of "free and fair elections" collapses.
Lawyers, for their part, said it would be logistically impossible to prosecute the millions of Nigerians who may decide to boycott local or nationals polls.
Around 20 countries worldwide enforce compulsory voting.
