Contaminated soil shipped to Port Kembla from Sydney's Barangaroo development site will be trucked out of the region and further shipments abandoned.
Lend Lease struck a controversial deal with the port's management earlier this year to ship up to 600,000 tonnes of soil from the Sydney site for use in land reclamation at Port Kembla.
But the deal came unstuck in August when the first load was found to contain pieces of asbestos, despite "rigorous testing" and assurances it would be safe.
The NSW Environment Protection Authority quickly revoked Lend Lease's permission to ship the soil and ordered that the stockpile at Port Kembla be kept wet and the air monitored.
Yesterday, the environmental watchdog confirmed there would be no more shipments and the company had not applied for a second resource recovery exemption.
An EPA spokeswoman said it had been Lend Lease's decision.
"Lend Lease is currently investigating a number of options to remove and dispose of the material that is currently on site."
A spokesman for the company confirmed it had not applied for a new approval to ship the soil.
"The material stockpiled at Port Kembla will be removed from the site via truck to an approved landfill site in the new year," he said.
The landfill site will not be in the Illawarra.
The spokesman also said no airborne asbestos had been identified when the material was taken to Port Kembla, and the company had worked closely with the EPA and port management to address the issue.
It is understood the material, which was being excavated from Barangaroo South to make way for building works, is now being trucked to registered landfill sites elsewhere.
Port Kembla Port Corporation chief executive officer Dom Figliomeni yesterday said the port would need to source fill for the outer harbour expansion from elsewhere.
"It always has been the port's objective that the material must be environmentally suitable for placement in our reclamation," he said.
Mr Figliomeni said he had not been formally notified that no future shipments would occur, but understood that to be the case from discussions with the company.
It was Lend Lease's responsibility to remove material already at Port Kembla and the company would need to work with the EPA to decide on an acceptable method and where to dispose of it, he said.
South Coast Labour Council secretary Arthur Rorris said stopping shipments and removing the soil was the "right call".
The labour council endorsed bans on unloading or handling the fill after the asbestos was found.