An international expert dismissed the statement and said bird flu in parts of Asia is here to stay.
Bui Quang Anh, head of the department's animal health department, said Vietnam has become more experienced in coping with the disease, which this time had broken out only on small farms.
"The situation of the epidemic shows signs of reduction due to the positive response of the concerned authorities and tough measures applied," he told reporters.
The virus that has killed 13 people in the country since late December is now reported in 35 of the country's 64 cities and provinces. At the same time last year, 56 provinces were hit.
Rearing of poultry could resume in March if the sanitary situation is good enough, Anh added.
A medical source said the last two patients in Vietnam with the deadly H5N1 strain of bird flu were discharged from hospital on Monday.
Vietnam declared last October that it had brought its latest outbreak of avian influenza under control. It first made such an announcement in March 2004 but had to admit later that the declaration had been premature.
Experts say avian influenza has entrenched itself in much of Asia and is unlikely to disappear anytime soon.
"What is happening this year is not an outbreak, it is an endemic recurrence of a disease that is here to stay," said Anton Rychener, representative of the Food and Agriculture Organisation.
"I would not pay much attention to this statement," he added. "Vietnam wants to reassure people before (lunar) new year."
Anh said a new decree issued by Prime Minister Phan Van Khai on February 3 controls more strictly the rearing of ducks, which are considered a reservoir of the virus.
"The breeding of water fowls and quails, the main source for bird flu transmission, is banned throughout the country between February 9 and June 30," he said, adding some provinces could extend the ban.
"Anyone who wants to restore poultry flocks this year must firstly register with the local animal health department," Anh also said, implying that the rampant raising of poultry last year might have contributed to the spread of the virus.
The slaughtering of poultry in small markets around the countries will be banned and major abattoirs established in the longer term, Anh added.
Vietnam also said it would soon try to use vaccines produced in China and the Netherlands on its poultry flocks. Vietnam had about 208 million poultry last December, according to official estimates.
"If tests are successful, we will use the vaccine on the poultry en masse by the end of this year," said To Long Thanh, vice director of the National Center for Veterinary Diagnosis.
Since the start of the latest outbreak more than 1.4 million birds have been killed, only one tenth of those culled during the first epidemic which began in parts in Asia in December 2003.
Twelve people died in Thailand and 20 in Vietnam during that outbreak. Another 13 died in Vietnam since the end of December including a Cambodian woman.
A regional meeting discussing the fight against the virus will be held in Ho Chi Minh City from February 23 to 25, under the sponsorship of the United Nations's FAO and the World Organisation for Animal Health.