A decision in this regard was taken at a cabinet meeting here, an official release said.
The project, promoted by KGS Group, had run into trouble after it was mooted nearly seven years ago with environment groups and people in the area holding that it would cause environmental hazards.
The CPI(M)-led LDF government in an affidavit filed in the Kerala High Court in a connected case in August had said that it had decided to take immediate steps to cancel its decision to notify approximately 500 acres of land in Aranmula as an industrial area.
The project, opposed by BJP in the state, came back to focus afresh after the Expert Appraisal Committee under the Environment Ministry had permitted KGS Group to conduct an environment study at a meeting on July 29.
The National Green Tribunal had in 2014 set aside the environmental clearance given by the UPA government to the project and directed KGS Aranmula International Airport Ltd, the promoters, to stop construction at the site.
The project also faced stiff resistance from devotees of Sri Aranmula Parthasarathy Temple, who said that the airport would cause structural damage to the temple.
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