The finance ministry announced its recommendation in its annual white book on the country's pension funds.
Norway's central bank, which is tasked with managing the enormous wealth fund, had asked to be permitted to invest in unlisted companies because of the possibility of higher returns.
But Finance Minister Siv Jensen said no.
"This is purely and simply because of the fact that we care about the fund's image... especially when it comes to transparency," she told reporters.
The fund, valued at 8.48 billion kroner (almost 880 billion euros or $1.08 trillion) at the end of 2017, was at the time invested in stocks (65.9 percent of the portfolio), bonds (31.6 percent) and real estate (2.5 percent).
The government also reiterated its opposition to allowing the fund to invest in unlisted infrastructure, but did the leave the door open to investments in unlisted renewable energy infrastructure, such as wind and solar energy farms.
The white book must still go through parliament, where the right-wing government is in the minority and may be required to negotiate compromises.