A timetable for switching off analogue radio shouldn't be set at this time, the communications department says.
In a report to government released publicly on Wednesday, the department also recommends a digital radio planning committee be created, chaired by media watchdog ACMA, to focus on the rollout of the service in regional areas.
So far digital services have been licensed for Adelaide, Brisbane, Melbourne, Perth and Sydney, with trials underway since 2010 in Canberra and Darwin.
According to the department, take up continues to grow slowly but steadily across the main states, with listenership reaching almost 25 per cent in the first quarter of the year.
That's been boosted by the availability of the service in cars, while Australians are also making the most of new technologies such as Spotify and Pandora.
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Given this change, the report suggests Australia should continue to rely on a range of radio technologies, with no set timetable at this time for analogue radio to be switched off.
"Digital terrestrial radio will continue as a supplementary, rather than a replacement, technology in at least the short to medium term," it said.
The department believes ACMA should be given the responsibility for determining where and when digital terrestrial radio services can start.
The federal government should also consider allowing broadcasters to choose the way in which they deliver their radio services.
The report also recommends minor amendments to be made to the regulatory regime to provide a simpler, more flexible process for planning and licensing of digital radio in regional Australia.
Permanent services being licensed in Canberra and Darwin should be a priority, it said.
