Prime Minister Jens Stoltenberg made the announcement at a news conference Wednesday afternoon.
The city has been on edge since Friday's bomb blast and mass shooting. Parts of Oslo, Norway's central station were evacuated briefly on Wednesday morning as police investigated an abandoned suitcase.
A bus driver saw a man leave the suitcase, but police found no explosives.
Stoltenberg vowed that the attacks will not intimidate Norway and that his countrymen will fight back with "more democracy."
"It's absolutely possible to have an open, democratic, inclusive society, and at the same time have security measures and not be naive," he said.
Cabinet ministers were expected to return to their offices on Wednesday.
The investigation into the massacre is now focused on a farm located north of Oslo, where officials say Anders Behring Breivik had more than six tons of fertilizer delivered to make bombs. The 32-year-old Norwegian has confessed to the explosion and shooting massacre hours later.
Since only one bomb was set off, authorities are now trying to account for the rest of the fertilizer.
Police have come under close scrutiny over how long it took them to reach the island after first reports of shots being fired at the island youth camp Friday. Although the island is only about 25 miles from the Norwegian capital, police needed 90 minutes to get to the scene.
A media helicopter was already hovering over the island when police arrived. Marius Arnesen, a cameraman for broadcaster NRK who shot video of the massacre at Utoya island, told The Associated Press that his helicopter arrived some time between 6 p.m. and 6:10 p.m. Police say got to the island at 6:25 p.m.
Police were already grappling with the wide damage inflicted in the downtown government quarter. When word of the shooting came, police drove rather than take a helicopter because the crew of the sole chopper available to them was on vacation. Then the first boat they tried to take to the lake island broke down.
The Associated Press contributed to this report.