PARIS—The French government said Tuesday it planned to stop segregating Islamist inmates due to worries the short-lived practice risked deepening radicalism in the country’s prisons rather than stemming its spread.

Justice Minister Jean-Jacques Urvoas said he would shut down four special wards that authorities had established inside prisons in recent years. Instead, the government plans to transform some of the wards into units where inmates will stay for four months to determine if they are hardened radicals. Anyone deemed...