The former Paralympics gold medallist had been expected to be released after serving 10 months of a five-year sentence for killing his model and law graduate girlfriend Reeva Steenkamp on Valentine's Day 2013.
Justice Minister Michael Masutha said the parole board had wrongly taken a decision to release Pistorius on parole before the athlete had served a sixth of his sentence, as required by law.
"It is therefore clear that there is no legal basis upon which such a decision was made ... one sixth of a five-year sentence is 10 months and at the time the decision was made Mr. Pistorius had served only over six months of his sentence," Masutha said in a statement.
"I came to the conclusion that the board had erred in sitting and considering his application for parole before the minimum period that he is required to serve under the relevant provision had lapsed," Masutha said on Talk Radio 702.
The minister said he had received a petition from the Progressive Women's Movement of South Africa opposing Pistorius' release on parole, saying it flouted the rules.
Ulrich Roux, a prominent criminal defence lawyer, said the minister's decision was "procedurally correct" but its timing was "bizarre".
"The eyes of the whole world are on South Africa and this certainly isn't a good reflection on our department of correctional services."
The minister has referred the case to the parole review board, which has 14 days from Wednesday to consider whether Pistorius should be released or serve a longer period in jail, Roux said.
"They can also reach a decision earlier, where they can either agree with the decision made by the parole board or return it and advise the minister not to release Pistorius," he said.
A family member said relatives had planned a "low-key welcome" for Pistorius on Friday. "We are shocked and disappointed that Oscar won't be home this Friday," the family member, who declined to be named, told Reuters.
Annelise Burgess, the family's official spokeswoman, said: "We accept the decision by the Minister of Justice and are considering our options."
Pistorius has admitted killing Steenkamp, 29, by firing four shots through the locked door of a toilet cubicle, saying he believed an intruder was hiding behind it.
Judge Thokozile Masipa said during sentencing the state had failed to convince her of Pistorius' intent to kill when he fired.
Prosecutors want the verdict of culpable homicide, equivalent to manslaughter, changed to murder because they argue Pistorius must have known when he fired that the person behind the door could be killed.
The athlete, nicknamed "Blade Runner" because of the carbon-fibre prosthetics he used during his career on the track, was expected to be confined to the home of his uncle, Arnold, a high-walled manor in the leafy suburb of Waterkloof.
(Additional reporting by Wendell Roelf; Writing by James Macharia; Editing by Andrew Roche)
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