Nsuta representative Williams Adomako said on Thursday teams that were trying to rescue the miners after the pit caved in on Sunday managed to locate the body of one miner and bring it to the surface.
But they were unable to reach 16 others in the stricken mine, which is more than 80 meters deep.
Government and local officials decided to stop the rescue in agreement with the families, said Adomako.
“Seventeen people have died … We cannot bring them up. All those here agree we should cover them,” he added.
Local chiefs were expected to perform burial rituals on Thursday.
Firefighter Ebenezer Yenzu, who was part of the rescue team, said the decision to stop the search was taken because of the risk of further collapses and on health grounds.
“As the days are going by the bodies are decaying. It can cause communicable diseases too,” he added.
On Wednesday, five bodies were spotted in the mine, but they and others were surrounded by stone debris.
Local resident Francis Eshun said covering the abandoned mine would prevent others from entering in the future.
“If they left it open they would definitely go back in to mine there,” he added.
The accident has been blamed on small-scale gold mining, known in Ghana as “Galamsey,” which has recently been the target of a government crackdown on environmental grounds.
One of the miners who escaped said he heard “unusual sounds” from the ground that prompted him to call on his colleagues to stop and go to the surface.
But as they climbed out, the walls of the mine collapsed.
Ghana is Africa’s second-largest gold producer, and exports of the commodity, along with minerals and oil, drive the country’s economic growth.
The industry involves a number of major global players but small-scale, illegal mining has been a persistent problem and accidents are frequent.
In 2010, at least 45 people were killed when an illegal mine collapsed after heavy rains.