The Interior Ministry has formally notified 70-year-old former military ruler of its decision.
The government said the application cannot be accepted in public interest as a number of cases are pending against him in various courts.
Sources said Musharraf will now approach the judiciary seeking removal of his name from the Interior Ministry's Exit Control List (ECL).
The decision came a day after the ruling-PML-N went into a huddle chaired by Prime Minister Nawaz Sharif to decide on Musharraf's application.
Media reports here said Gen Raheel had advised the government to allow Musharraf to go abroad for treatment and to meet his 95-year-old ailing mother in the UAE.
Anybody whose name is on the ECL cannot leave the country without permission.
Musharraf was indicted on Monday by a special court hearing the high treason case against him, becoming the first-ever military ruler to face criminal prosecution.
The court had put the ball in the government's court in relation to the request put forward by the former president to be allowed to travel abroad.
The ruling said as long as the accused was not in custody, he could seek medical treatment at any place of his choice, adding that an accused could not be restrained from travelling nor could his/her rights as a human being be curtailed for any reason.
Musharraf was admitted to the Armed Forces Institute of Cardiology, Rawalpindi, on January 2 after he complained of "heart problem" on his way to the court.
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