The state Executive Council approved the cancellation in view of the exponential growth of the city.
The cancellation of the exercise, which usually holds every last Saturday of the month, came after the state Executive Council approved a review of the environmental laws and procedures in the state at its meeting on Wednesday, November 23.
According to the Council, this is in order to meet the present day challenges and to promote a clean and healthy.
In a statement issued on Wednesday, the Commissioner for Information and Strategy, Mr Steve Ayorinde said the cancellation of the exercise became necessary due to present economic realities in the country.
He said: "It is no longer appropriate to restrict movement of people for three hours in a mega city like Lagos at a time they should be pursuing commercial and entrepreneurial activities.
"In the last two decades, Lagos has grown exponentially into a mega city with the attendant huge environmental problems associated with managing a population of over twenty million people.
"But sadly, the environmental laws, policies and procedures being practiced in the State have not been able to match the phenomenal growth and the dream of a 24-hour economy, hence the need for the reform."
Ayorinde said the government is aware of a recent judgment by the Court of Appeal.
He said that the thrust of the fresh initiatives, among others, is to promote holistic and modern solutions to the unique environmental challenges confronting the State, while encouraging citizens to voluntarily partner with government to achieve the desired goals.
The statement further said: "After a careful consideration, the State Executive Council has therefore resolved that the present economic climate can no longer support the continued lock down of a mega city like Lagos, when the citizens should be free to engage in commercial and entrepreneurial activities that can promote economic growth and prosperity.
"Furthermore, Government will also accelerate the introduction of fresh reforms through the passage of the new harmonised environmental laws that will drive meaningful changes in areas of harmonised billing, waste management, modern Landfill sites, noise pollution, introduction of an Environmental Trust Fund and an Environmental Advisory Council.
"The Government wishes to reiterate its strong commitment to a clean and secure environment for the benefit of its citizens, and will continue to provide the necessary leadership to meet the environmental challenges of a mega city like Lagos.
"Lagosians and visitors alike are therefore urged to embrace these changes and imbibe a culture of voluntarily maintaining and preserving their environment to create a beautiful and healthy city that we all can be proud of."
Ayoring added that henceforth, the State will be more strict in ensuring expeditious enforcement against contraventions of its policies and regulations.