The new agreement requires the companies to dump the excavated waste on the site known as T2, adjacent to the existing coal terminal.
Queensland Premier Annastacia Palaszczuk said: "Today my Government sends a clear message: we can protect the Great Barrier Reef, and we can foster economic development and create jobs.
"The Government will not proceed with the current approvals process. We will withdraw the applications and present a new application centred on the T2 site."
Environmental groups are concerned over possible pollution and damages to the Great Barrier Reef as the expansion would involve large scale dumping of dredge spoil in the sea near the Reef.
Adani is currently in advanced talks for $16.5bn Carmichael project, and intends to make a final decision on the project later this year, reported Reuters.
GVK will go ahead with its planned $6bn Alpha project. Both the projects will support the region with around 4,000 jobs.
State Development Minister Anthony Lynham said: "The Port of Abbot Point development is vital to Queensland’s economic future.
"That’s why we are prioritizing this project and are dedicated to ensuring it progresses in a transparent and environmentally responsible manner."
Image: Abbot Point, surrounded by wetlands and coral reefs, is set to become the world’s largest coal port. Photo: courtesy of Greenpeace / Tom Jefferson.
