City commissioners were considering a request from the convention and visitors bureau and a bill was ready to go before next month's special session of the Alabama Legislature.
If the measure was approved by lawmakers and signed by the governor, Dothan bars and restaurants could have been tapping kegs by Oct. 1.
But Tuesday, commissioners decided to draw up new legislation that lets voters decide if they want draft beer and alcohol sales on Sunday.
The bill will likely be introduced during next February's regular legislative session.
The bill city commissioners had been considering would have also legalized draft beer sales in unincorporated areas of Houston County.
But smaller cities could have also sold draft beer by just passing their own local ordinances.