Last month, the Loviisa City Board gave the green light for the sale, subject to final approval from the City Council.
But this surprise announcement sparked public anger. Residents accused the city of conducting secret dealings with the company and trying to railroad through the lucrative deal without public consent. Members of the City Board signed agreements not to disclose the existence of the sale until it was given preliminary approval last month.
On Wednesday afternoon the city council was still in favour of the sale. By the end of the evening, however, they bowed to public pressure and cancelled the deal.
The National Board of Antiquities also opposed the sale because the proposed site because it is located less than a kilometre from Svartholm sea fortress, a major tourist attraction.
There are no plans in motion to build a sixth nuclear reactor in Finland; E.ON had not yet applied for permission from the state.
Loviisa, on the south-east coast, is already the site of one nuclear plant.