The motion, tabled by Ulster Unionist David McNarry, fell because it did not receive cross-community support.
44 unionists voted in favour of the motion; 38 nationalists opposed it.
As the debate got under way, Assembly Speaker William Hay confirmed he had received a valid petition of concern from Sinn Féin MLAs for the first time since devolution returned.
This means the motion would require a majority of nationalists and a majority of unionists to pass, making it virtually impossible given the opposition to Mr McNarry's motion.
Outside the chamber, Sinn Féin Seanad member Pearse Doherty said Mr McNarry's motion had galvanised Irish speakers on both sides of the border.
Sinn Féin MLA Carál Ní Chuilín described it as a divisive and outrageous motion.
She said the Good Friday Agreement created a responsibility on government departments to take action to promote the Irish language.
The Culture, Arts and Leisure Minister, Edwin Poots of the DUP, is considering the Irish Language Act at present, which has been strongly opposed by many unionists.
Recently, the Stormont Health Minister Michael McGimpsey of the Ulster Unionists ordered his department to stop using Irish translations in newspaper advertisements and news releases.
He said the policy had cost over £150,000 in the past five years.
Mr McGimpsey said his department would continue to accept correspondence in both Irish and Ulster-Scots.
