Nicaragua's first lady and government spokeswoman, Rosario Murillo, said continuing the effort would put more lives at risk.
Murillo told the Chanel 4 television station that "experts had to admit that any rescue was impossible because of the danger."
Originally, authorities had said four miners remained trapped, but workers at the wildcat mine said all along that more men had been in the mine when it partly collapsed on Thursday.
Later Tuesday, Murillo said the government will provide aid to seven families who had gathered outside the mine in hopes their relatives would be rescued.
At least 26 miners were originally trapped by the collapse at the El Comal gold and silver mine near Bonanza, about 260 miles (420 kilometers) northeast of Managua. Twenty-two were rescued alive.
The exact number of missing had been unclear because the miners were freelancers, not formal employees.
The mine is operated under a concession held by Hemco, which is owned by Colombia-based Minero SA. But the trapped miners themselves are freelancers allowed to work in the area if they sell any gold they find to the firm.
Rescuers said there were constant cave-ins inside the water-soaked mine.
Jorge Hernandez had been waiting outside the mine in hopes that his missing brother would be found. "My brother was left buried," said Hernandez. "I don't know what I'm going to tell his daughters. They depended on him."