The French Polynesian government says its deal with the US institute planning to build floating islands is now void.
The suggestion to build a floating platform in the lagoon in the south of Tahiti was resisted by some local residents, with opposition politician Valentina Cross asking the government last week to pull out of the agreement, RNZI reports.
The Atimaono lagoon was being considered because of its depth and proximity to Tahiti.
As criticism grew, the ruling Tapura Huiraatira party said nothing had been signed.
Now it says that its deal with the US-based Seasteading Institute was not a legal document and that it expired at the end of 2017.
It also said it hoped that this would end the debate about the floating islands.
The Seasteading Institute approached French Polynesia because it found that its links to France, its autonomy and calm waters offered a suitable environment for the project.