The decision is considered to be a victory for tribal groups amid fears that the terminal would threaten their fishing activities.
Australia's Ambre Energy had applied to build the port, which would have exported millions of tonnes of American coal to Asia.
Associated Press reported that the Department of State Lands said that the applicant presented some possible options to mitigate the effect on fishing, but failed to commit to any specific action.
A spokesperson from Ambre said: “We disagree with this political decision and we are evaluating our next steps and considering the full range of legal and permitting options.”