The council voted 15-0 to postpone the New York vote until Friday.
Its president, Emyr Jones Parry, said on Tuesday the action was taken in the expectation the draft resolution would be adopted on Friday.
The measure would release up to $2.7 billion to the families of 270 victims killed in a 1988 airliner bombing over Lockerbie, Scotland.
The vote had been set for early on Tuesday but minutes before France threatened to veto the measure unless action was delayed.
The French want more time for a settlement to be reached on Libyan compensation for the bombing of a French airliner in 1989 that killed 170 people.
Libya has accepted responsibility
The UN sanctions were imposed in 1992 and suspended in 1999 after Libya turned over two suspects for trial for the Lockerbie bombing.
And in a deal negotiated with Britain and the United States, Libya last month accepted responsibility for the Lockerbie bombing and agreed to pay an expected $2.7 billion in compensation.
That cleared the way to end sanctions.
But France, which several years ago reached a separate compensation deal with Libya, balked at the Lockerbie settlement with French families insisting they get higher compensation.
Separately, Washington has imposed its own sanctions, including a ban on Libyan oil sales to the United States, which would not be affected by UN Security Council decisions.
The United States intends to abstain in the final vote for domestic political reasons, diplomats said.