The decision by Immigration Minister Alex Hawke means Djokovic now faces being deported.
However, the 34-year-old Serbian can still launch another legal challenge to remain in the country.
“Today I exercised my power… to cancel the visa held by Novak Djokovic on health and good order grounds, on the basis that it was in the public interest to do so,” the minister said in a statement.
The move also means Djokovic likely faces a three-year ban on obtaining a new Australian visa.
Djokovic’s visa was first revoked shortly after his arrival in Melbourne on 6 January, after Australian border Force officials said he had “failed to provide appropriate evidence” to receive a vaccine exemption.
There was also an enormous backlash from some Australians, who have lived under long and strict Covid lockdowns, that Djokovic had been allowed in despite being unvaccinated.
He was detained, spent hours at immigration control at the airport and then spent days at an immigration hotel. Days later his visa was reinstated by a judge, who ordered his release, ruling that border officials ignored correct procedure when he arrived.
But on Friday evening in Melbourne, Mr Hawke cancelled Djokovic’s visa under separate powers in Australia’s Migration Act.
The act allows him to deport anyone he deems a potential risk to “the health, safety or good order of the Australian community”, however Djokovic can still appeal this.
It comes after Djokovic addressed allegations that he had made a false declaration on his travel form – which stated that he had not travelled in the 14 days prior to his arrival in Australia, when in fact he had been to Spain.
He said the mistake was made by his agent, calling it “human error” and adding that it was “not deliberate”.
He also admitted meeting a journalist and having a photoshoot after testing positive for Covid-19.