The tennis star's visa was cancelled over community health risk concerns, with the tournament set to begin on Monday.
The Australian government cancelled Novak Djokovic's visa for a second time, saying the world tennis number one, who is unvaccinated for Covid-19, may pose a risk to the community.
Australian Immigration Minister Alex Hawke exercised his discretionary powers to revoke Djokovic's visa on Friday after a court quashed an earlier revocation and released him from immigration detention on Monday.
"Today I exercised my power under section 133C(3) of the Migration Act to cancel the visa held by Mr Novak Djokovic on health and good order grounds, on the basis that it was in the public interest to do so," Hawke said in a statement.
The decision raises the prospect of a second court battle by the Serbian tennis star to be allowed to stay and bid for a record 21st major tennis title at the Australian Open, but time is running out with the tournament starting on Monday.
Under the section of the Migration Act which the minister used to exercise his power to cancel the visa, Djokovic would not be able to secure a visa to come to Australia for three years, except in compelling circumstances that affect Australia's interest.
Djokovic, the Australian Open defending champion, was included in the draw on Thursday as top seed and was due to face fellow Serb Miomir Kecmanovic for his opening match, probably on Monday or Tuesday.
The saga has intensified global debate over rights of choice for vaccines, raised questions over Australia's bungled handling of Djokovic's visa and become a tricky issue for Prime Minister Scott Morrison as he campaigns for re-election.
The tennis star, a vaccine sceptic, fuelled widespread anger in Australia when he announced last week he was heading to Melbourne for the Australian Open with a medical exemption to requirements for visitors to be inoculated against Covid-19.
On his arrival, Australian Border Force officials decided his exemption was invalid and he was held alongside asylum-seekers at an immigration detention hotel for several days.
Australia has endured some of the world's longest lockdowns, has a 90 percent vaccination rate among adults, and has seen a runaway Omicron outbreak bring nearly a million cases in the last two weeks.
An online poll by the News Corp media group found that 83 percent favoured the government trying to deport the tennis star.
"Absolutely, he should go. He hasn't done the right thing and is being a bit cheeky about it," said Venus Virgin Tomarz, 45, who lives in Melbourne.