The governor of the southern province of Sindh, Saeeduzzaman Siddiqi, refused the bill on the advice of Chief Minister Syed Murad Ali Shah and the Muttahida Qaumi Movement party (MQM) because language in the legislation could be considered un-Islamic.
Population: 192.8 million
Christian population: 3.9 million
Types of persecution: Blasphemy laws used to settle personal scores against minorities including Christians
The bill would have required adults to take a 21-day period to consider their decision to change religions.
The bill received strong criticism after the Sindh assembly voted in favour of the legislation last November.
A controversial provision in the bill stated that nobody under 18 could convert to Islam, even out of free will.
Critics of the bill say this provision goes against Islam and the constitution.
The bill was designed after a number of NGOs highlighted that as many as 1,000 girls and women are forced into Muslim marriages and made to convert to Islam annually.
Nasir Saeed, director of Christian charity CLAAS-UK, said he had grave concerns over the u-turn on the legislation.
He said that CLAAS has been campaigning against forced conversion in Pakistan and was glad when the Sindh assembly unanimously adopted the bill.
He added: "Now, we are very concerned because I think even if the whole law is not scrapped, the age limit will be removed, and if the age limit is removed, then it will become ineffective and instead of stopping forced conversion it may increase as people will be free to commit this crime under the guise of the religion without a fear of prosecution."