There is greater potential for the economic exploitation of Swiss forests without degrading the environment, according to the authorities.
In a statement on Monday the Federal Environment Office said wood should be used more often as a building material, in composites and finally as a renewable energy source.
"Wood should be utilised to extract a maximum value from it," the office said, which is launching a four-year forestry management action plan.
The goal is to raise awareness among forest owners, industrial end-users and the general public about the diversity of wood.
Environmental organisations including the WWF and Pro Natura welcomed the new policy providing a careful approach is taken so as not to endanger biodiversity or the forests' recreational function.
"Forestry and the timber industry make an important contribution to the government's energy, climate and resources policies," the environment office said. "The value added chain from tree to the finished product is internationally competitive and environmentally sustainable."
Approximately one third of Switzerland is covered in forest.