Environment Minister Tanya Plibersek has rejected Clive Palmer's central Queensland coal mine under the nation's environmental laws.
The refusal is the first such determination to be made under the legislation.
Ms Plibersek announced on Wednesday she had decided to knock back the project as it would have unacceptable impacts on nearby areas.
She said it posed a very real risk of causing irreversible damage to the Great Barrier Reef as it was less than 10km from the natural wonder.
"After a thorough assessment of all of the information before me, I've decided to stick with my decision and I won't be approving the central Queensland coal project," Ms Plibersek said in a video posted to Twitter.
"I've decided that the adverse environmental impacts are simply too great."
The proposed project was an open-cut mine about 130km northwest of Rockhampton that would have had capacity to produce up to 10 million tonnes of coal every year for 25 years.
Ms Plibersek previously said last year she wanted to block the proposed mine and undertook public consultation, during which the overwhelming majority of people called for the project not to go ahead.
