Australia's government said on Wednesday it has blocked a planned coal mine because it would endanger the Great Barrier Reef, a decision hailed by environmental groups as historic.

Mining billionaire Clive Palmer's scheme would have created an open-cut coal mine 10 kilometres from the reef, it said, threatening a marine wonder and Unesco world heritage site that has suffered in recent years from heat-related coral bleaching.

"I have decided that the adverse environmental impacts are simply too great," Environment Minister Tanya Plibersek said in a video statement.

"The risk of pollution and irreversible damage to the reef is very real," she said, also citing risks to breeding grounds for fish and to fragile seagrass meadows that feed dugongs, a marine mammal.

The federal government received 9,000 submissions from the public in 10 business days about the planned mine in Queensland, she said, as part of a consultation undertaken before she confirmed an initial proposal made last year to stop the mine.

Responses from the public overwhelmingly opposed the planned Central Queensland Coal Mine.

"This is a great decision from Tanya Plibersek and the first time a federal environment minister has rejected a coal mine under Australia's environment law," said Australian Conservation Foundation climate and energy campaigner Jaclyn McCosker.

"It would have extracted up to 18 million tonnes of coal per year for burning here and overseas, fuelling floods, droughts and the marine heatwaves that bleach coral reefs."

The Australian Marine Conservation Society described it as a "historic decision".

"This is the first time the Australian government has rejected a coal mine after federal assessment and should be the first step in rejecting new fossil fuel projects," said the society's Great Barrier Reef campaigner Cherry Muddle.

The company behind the project has been asked for its reaction.

Prime Minister Anthony Albanese's centre-left Labor government was swept to power last year promising to change the pro-fossil fuel stance of the previous decade-old conservative government.

Australia, one of the world's largest coal exporters, is now committed to cutting carbon emissions by 43 percent by 2030 from 2005 levels, on a path to reaching net-zero emissions by 2050.

But the government has rejected calls from environmental groups for a ban on all new mining projects, saying each must be judged on its merits. (AFP)