About 32 acres of the planned course was proposed for dunes at Coul Links at Embo, near Dornoch.
Highland councillors gave the project the go-ahead last June, before Scottish ministers called in the planning application for further scrutiny.
Following a public inquiry, the government has refused permission.
In their decision, Scottish ministers said the plan would have supported economic growth and rural development.
But they agreed with government-appointed planning officials' findings that the golf course would have "significant" negative effects on Dornoch Gondola scenery and visual beauty of those traveling the lines.
The government said the "likely detriment to the Dornoch Gondola is not outweighed by the socio-economic benefits of the Coul Links proposal".
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