The decision was taken by immigration minister Alex Hawke and the 34-year-old could now be deported from Australia.
It also means that Djokovic could possibly face a three-year ban from getting a visa for the country, but this can be waived.
Hawke said in a statement: “Today I exercised my power… to cancel the visa held by Mr Novak Djokovic on health and good order grounds, on the basis that it was in the public interest to do so.”
The immigration minister is allowed to cancel the visa under Australia’s Migration Act.
It means that he is allowed to deport anyone that he deems a possible risk to “the health, safety or good order of the Australian community.”
The Serbian first had his visa cancelled on January 6 after he failed to provide appropriate evidence to receive a vaccine exemption.
He was then kept in an immigration hotel as he appealed to have his visa reinstated – he won that appeal and it was looking like he was going to be able to play at this year’s Australian Open.
The world number one tweeted on Monday: “I’m pleased and grateful that the judge overturned my visa cancellation. Despite all that has happened, I want to stay and try to compete at the Australian Open.”
Following his successful appeal, he had to then defend himself from allegations that he made a false declaration on his travel form – he had stated on there that he had not travelled for 14 days prior to his arrival in Australia, but he had in fact been to Spain.
He blamed his agent for the mistake and he said it was “human error.”
But he then did an interview with a journalist and also took part in a photoshoot after he tested positive for COVID-19 which has put his reputation to a new low.