The four centre-right opposition parties known as the Alliance in Sweden had pushed for the Nordic nation to send Jas Gripen aircraft to the Middle East for the first time since 2011, when Sweden joined international efforts in Libya.
But Sweden's Social Democrat-Green coalition said on Wednesday that it did not back the idea.
"The main reasons are that so far this is a legal grey area. That could change if there's a very clear UN mandate. But so far it hasn't been established by international law," Foreign Minister Margot Wallström told reporters about the proposal to use Sweden's Jas Gripen fighter jets.
However she said Sweden would offer military transport flights to France.
"It is costly and at the same time it's really important for logistics, so it's a substantial contribution," said Wallström.
She also said that France had asked to use Swedish arms supplies, but said the request would have to be evaluated in the new year to see if it meets Swedish weapon export legislation.
"I am disappointed at the government's sluggishness and we would have been able to provide a military component," said Anna Kinberg Batra, leader of the Moderate Party in the centre-right Alliance, after the announcement.
Her comments were echoed by a military expert.
"An absolute minimum, I think there should be more. This is our generation's worst international threat and that Sweden can't do more is not good," Jan Hallenberg, professor at the Swedish Defence University, told the TT newswire.
Minister Stefan Löfven confirmed a month ago that his country backed a plea for help from France, following the deadly attacks in Paris on November 13th, the worst ever on French soil.
"We are not at war, but we stand together with France and the EU," he said at the time.
Sweden raised its terror threat level to 'high' shortly after the Paris attacks. And Wallström said the heightened state of alert had been one of the factors behind the government's decision.
"Of course you have to conduct a security assessment, both for those we send in harm's way and also about taking that sort of thing into account. We do that with the help of our security services," she said.
Since then, Defence Secretary Peter Hultqvist has also been contacted by the US government, asking for support in the fight against extremism.
Sweden – which is not part of Nato – has already sent around 35 soldiers to train Kurdish forces in Iraq to tackle Isis fighters. In November, Hultqvist said that their mission could be extended until December 2016.