The decision follows the Ontario Superior Court of Justice on Tuesday striking down a transition programme, including the Electric and Hydrogen Vehicle Incentive Program, set up by the new Ontario government, which excluded Tesla customers from qualifying for rebates.
The incentive programme provides rebates of up to C$14,000 ($10,640) for people who bought electric cars.
"I have directed the ministry to expand the wind-down process," minister of transportation John Yakabuski said in a statement on Friday.
"Ending the Electric and Hydrogen Vehicle Incentive programme could save Ontario taxpayers up to an estimated $1 billion over four years," he said.
The ministry said on Friday incentives will be provided as long as certain conditions were met.