Women's affairs ministry official Wahyu Hartomo said such tests would violate basic human rights and potentially harm the health of young women.
"That kind of test violates human rights and will have serious psychological impacts on students," he told AFP.
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"It is more effective for our generation to receive moral education from their parents at home, especially with the (bad) influence from the Internet."
Lawmakers in Sumatra island's Jambi province have agreed to drop the idea, which was proposed by local parliamentarian Bambang Bayu Suseno, Hartomo said.
Suseno believes girls should be required to pass virginity tests before they can enter state-funded high schools, citing concerns over pre-marital sex among teenagers in the Muslim-majority country.
"The idea is simple. Parents are obviously afraid of their daughters being deflowered before the time comes, so before they continue their studies they can undergo a virginity test and automatically protect their dignity," he told The Jakarta Post newspaper.
"Why are girls who lose their virginity allowed to go to public school?"
Indonesian officials are struggling to balance the country's rapid modernisation, especially the runaway growth of Internet use, with traditional, mainly Muslim values.
President Susilo Bambang Yudhoyono has signed a controversial anti-pornography law, backed filters against online pornography and warned that a "frenzy" of Internet use could tear the nation apart.
Earlier this year police entered classrooms to check teenage students' mobile phones for evidence they had downloaded celebrity sex clips that went viral on the Internet, causing a national scandal.
