"We have decided to suspend the championship," deputy minister for sport Yiorgos Vassiliadis told reporters after an emergency meeting with Prime Minister Alexis Tsipras.
"It will not start again without a new framework agreed by all," Vassiliadis said, adding that the government was in close contact with European football body UEFA, which he said had been "shocked" by the incident.
Police have issued a warrant for the arrest of PAOK owner, Greek-Russian businessman Ivan Savvidis, after he stormed the pitch on Sunday, accompanied by bodyguards, to confront the referee in protest at a 90th-minute disallowed goal in a top-of-the-table clash against AEK Athens.
The match was interrupted as AEK's squad walked off the pitch. The goal was later allowed.
Vassiliadis said the government had "fought to clean up" Greek football "and would not allow all this effort to be threatened".
"We await proposals from the federation and the league," he said. "A tougher framework is needed."
He did not rule out the prospect of Greek clubs sitting out next season's European matches, but insisted the national team would not be affected.
PAOK and AEK are in a neck-and-neck race for the league title, which would be their first in over 14 years.
Olympiakos have won the last seven championships under the ownership of Greek shipowner Vangelis Marinakis, who, like Savvidis, is one of Greece's most prominent businessmen.
The league suspension is the latest stopgap measure adopted by the Tsipras government to maintain order in a championship spiralling out of control.
Less then a month ago, fans of the four most popular clubs -- AEK, PAOK, Olympiakos and Panathinaikos -- were banned from away games after recurring violence.
This was after Olympiakos fans clashed with police on February 4 after a shock home defeat to AEK dealt a serious blow to their title defence.
Yet a few weeks later, another match in PAOK's Toumba stadium had to be abandoned after a cashier roll thrown from the stands hit the coach of visiting rivals Olympiakos.
PAOK were initially docked three points, but managed to overturn the decision on appeal.
A tobacco industrialist with extensive holdings in the northern port city of Thessaloniki, Savvidis controls the city's top hotel and recently also bought one of Greece's top newspapers, Ethnos.
The 58-year-old, a former lawmaker with the party of Russian president Vladimir Putin, is considered a political ally of Tsipras.
A police source on Monday said Savvidis was not sought over the gun, for which he has a license, but for the pitch invasion, a misdemeanour that carries no prison term.
Savvidis, who owns companies that are leading sponsors of the Greek league, defended his behaviour.
"Ivan (Savvidis) didn't threaten anybody with a gun," his media department told Russia's Sport Express newspaper.
"It means that the provocative headlines in certain media are totally untrue.
"He carries weapons as he has a permission for it. It's not prohibited in Greece.....Savvidis has allowed himself some excessive emotions but, once again, he didn't threaten anybody with a gun."
Last year, Savvidis was part of a Franco-German consortium that won a bid for the privatisation of the Thessaloniki port authority.
But the deal was postponed after a Russian bank backing Savvidis was placed under temporary administration.
In a rare step, the US embassy in Athens later expressed concern over the issue, suggesting a lack of transparency over the funding behind the deal.