Parks Canada will continue operating the Radium, Miette and Banff Upper hot springs in Kootenay, Jasper and Banff National Parks.
It had been searching for a private operator to take over the hot springs since 2008.
Catherine McKenna, the minister of environment and climate change who is responsible for Parks Canada, made the announcement Friday.
"The decision for Parks Canada to keep the responsibility for operating the hot springs will mean all Canadians can continue to have access to the hot springs," she said in a release.
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"And it will make sure we are able to continue the traditional use of these special places by Indigenous peoples."
The initial announcement of possible privatization was met by protests from residents worried the move would cause admission prices to rise.
Some 20 First Nations groups also consider the hot springs to be part of their traditional lands.
Established in 1885, the Hot Springs Reserve in Banff was Canada's first national park and the third established in the world.
More than 800,000 people from around the world visit the hot springs every year.