Energy minister Bob Chiarelli, announced on Thursday that the province will develop a competitive procurement process for renewable energy projects larger than 500kW in size.
The new rules will also give municipalities more control over project siting, which has been a sore spot with many local governments and anti-wind groups.
Chiarelli also announced the government intends to comply with the WTO ruling, adding he expects Ontario's burgeoning wind and solar supply chain to continue to be viable. "I have confidence in the resilience of the clean energy manufacturing sector," he said.
"Ontario is not backing down from continuing to build a robust renewable energy sector that creates tens of thousands of good jobs."
Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), said the industry is encouraged by Chiarelli's continued commitment to clean energy and that it would work with the government "to establish new long-term renewable energy targets and stable and ongoing new procurement opportunities".
The 50% local sourcing rules surrounding Ontario's FIT programme had proved controversial, with the EU, Japan and the US all claiming it is anti-competitive.
However, it has led to substantial wind energy investment, with Repower and Siemens among those planning factories in the province.