Prime Minister Tony Abbott believes too much forest is locked up and favours more access for loggers, and asked the UN cultural body to delist 74,000 protected hectares (183,000 acres) in the southern island state.
But delegates at UNESCO's World Heritage Committee meeting in Doha turned down the controversial request, saying it would set an unacceptable precedent.
It was the first time a developed country had asked for a delisting.
"The World Heritage Committee delivered a strong rebuke to the Australian government by rejecting its request to delist Tasmania's new World Heritage forests so they could be logged," they said.
"The World Heritage Committee's decision also sends a clear message to the Tasmanian state government, which wants to log other iconic forests, such as the Blue Tier, Tarkine, Bruny Island, Tasman, Reedy Marsh and the North-East Highlands."
Former Greens Party leader Bob Brown, a prominent Tasmanian environmentalist, described the decision as a "global diplomatic humiliation" for the prime minister.
The area slated for delisting was part of 120,000 hectares added last year to the Tasmanian Wilderness area under the previous Labour government - the culmination of a long battle waged by environmentalists.
The government claimed the area it wanted delisted was already "degraded", having been logged before. Opponents said only 8.6 per cent of it has been disturbed, with the rest pristine old-growth rainforest.
Environment Minister Greg Hunt said the government accepted the decision, while calling it a "minor boundary modification".
"Australia accepts and will consider the decision of the World Heritage Committee."
Hunt said the zone the government wanted excised included plantations and areas that previously had been impacted by forestry operations and other infrastructure.
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