The 13.5m-high (45ft) statue, including plinth, was due to stand in a square in Chile's capital Santiago.
But the National Monuments' Council refused to give the project its blessing, leaving the sculptor with nowhere to put the giant statue.
The council said the statue was too big for the site and would ruin the harmony of the square.
p>The clay model that would be used to make the statue of the Pope is already finished and is sitting in a warehouse in central Santiago.The next step would have been to take it to a foundry so that it could be cast in bronze and placed in the square.
The National Monuments' Council, which oversees such projects, also criticised the project because it involves placing the statue over an underground car park.
It said that was too undignified for such a revered figure as the late Pope John Paul.
The decision leaves the sculptor with a problem - what to do with a towering statue of the Pope?
The most likely outcome is that it will be placed somewhere else in Chile, possibly on the Pacific sea front or on a hilltop overlooking Santiago.
Many people feel that would be a more fitting resting place for such an imposing statue.
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SIC: BBC