The Australian Border Force issued a statement early Thursday local time saying Djokovic failed to provide appropriate evidence to meet entry requirements and "has visa has been subsequently canceled."
The top-ranked Djokovic flew in after receiving a medical exemption from the strict coronavirus vaccination requirements in place for the Australian Open, where he is a nine-time winner.
Australian media reported that Djokovic's team had applied for the wrong type of visa for a person with a medical exemption.
Djokovic's lawyers are expected to appeal the decision, which came after the 20-time major winner had to spend more than eight hours at the at Melbourne Tullamarine Airport waiting to find out if he would be allowed into the country.
Djokovic's father, Srdjan Djokovic, told the B92 internet portal that his son was held "in a room which no one can enter" at the airport, guarded by two policemen.
Djokovic's participation in the Australian Open has become a hot political topic, with many Australians furious that he was granted an exemption to enter the country. Meanwhile, Serbian President Aleksandar Vucic said on Instagram that spoke to Djokovic while he was being held at the airport, and added that Serbian authorities were taking measures "so the harassment of the best tennis player in the world be stopped in the shortest possible time."
Speculation of a possible issue with the visa emerged while Djokovic was in transit and escalated with mixed messages from federal and state lawmakers.
Djokovic's revelation on social media that he was heading to Australia seeking a record 21st major title sparked some debate and plenty of headlines on Wednesday, with critics questioning what grounds he could have for the exemption and backers arguing he has a right to privacy and freedom of choice.
Australian Open tournament director Craig Tiley defended the "completely legitimate application and process" and insisted there was no special treatment for Djokovic.
The Victoria state government-mandated that only fully vaccinated players, staff, fans and officials could enter Melbourne Park when the tournament starts on Jan. 17.
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Only 26 people connected with the tournament applied for a medical exemption and, Tiley said, only a "handful" were granted.
Among the reasons allowed for those applying for a vaccination exemption can include acute major medical conditions, serious adverse reaction to a previous dose of a COVID-19 vaccine, or evidence of a COVID-19 infection within the previous six months.
Djokovic tested positive for the coronavirus in June 2020 after he played in a series of exhibition matches that he organized in Serbia and Croatia without social distancing amid the pandemic.
Concerns about Djokovic's visa status took a while to circulate.
Australian Prime Minister Scott Morrison initially said the medical exemption decision was a matter for the government of Victoria, where Melbourne is the state capital.
"They have provided (Djokovic) with an exemption to come to Australia, and so we then act in accordance with that," Morrison said. "States provide exemptions for people to enter on those basis, and that's been happening for the last two years."
Home Affairs Minister Karen Andrews then clarified the border process.
"While the Victorian government and Tennis Australia may permit a non-vaccinated player to compete in the Australian Open, it is the Commonwealth government that will enforce our requirements at the Australian border," Andrews said. "If an arriving individual is not vaccinated, they must provide acceptable proof that they cannot be vaccinated for medical reasons to be able to access the same travel arrangement as fully vaccinated travelers."
When asked again about Djokovic's case, Morrison added: "If that evidence is insufficient, then he won't be treated any different to anyone else and he'll be on the next plane home."
"And so if medical exemptions had been provided by medical professionals and that's been furnished to him as a proviso for him to get on that plane, well, that will have to stack up when he arrives in Australia," the prime minister said.