Blaenau Gwent County Borough Council said the £30 million project would be delayed because of issues with safety and engineering standards on the track and with the signalling.
Deputy First Minister Ieuan Wyn Jones said: “Until this was brought to my attention earlier today, I had been assured by Blaenau Gwent and its delivery agents Capita Symonds that passenger services would begin before Christmas.
"Whilst I share the deep disappointment caused by this development, public safety has to come first."
The new route has involved laying 21,000 metres of rail, building 800 metres of platform and opening six new stations.
It is now hoped that the service will begin in January.