Australia has stripped Chinese billionaire political donor Huang Xiangmo of permanent residency and killed off his citizenship application.

Key points: Huang Xiangmo and his companies have donated at least $2 million to Australian political parties

Huang Xiangmo and his companies have donated at least $2 million to Australian political parties Authorities have rejected his bid for Australian citizenship and stripped his permanent residency

Authorities have rejected his bid for Australian citizenship and stripped his permanent residency Australia's spy agency has previously warned political parties against accepting money from the billionaire

Mr Huang quickly rose to become a leading pro-China lobbyist, courting politicians and donating at least $2 million to Australian political parties through his companies.

But the decision from the Home Affairs Department, made while Mr Huang was offshore, leaves him unable to re-enter the country.

The ABC confirmed the businessman's "right to return to Australia has been cancelled".

The Nine media group reported the application had been refused for a number of reasons, including on character grounds and because of concerns about the reliability of answers given during interviews.

The ABC understands the decision to ban Mr Huang from Australia was delivered months ago.

A joint ABC-Fairfax investigation in 2017 revealed his bid for an Australian passport had stalled amid concerns among security agencies about Mr Huang and his links to the Chinese Communist Party.

Domestic spy agency ASIO, which scrutinised the citizenship request, previously warned the Liberal, Labor and National parties about taking cash from Mr Huang, fearing he could try to advance Beijing's interests.

Some analysts predicted that Beijing would react angrily if any of its citizens were targeted under legislation designed to crack down on foreign interference.

But the Foreign Minister Marise Payne played down that possibility.

"[China] has not raised it with me and I don't expect to be the subject of a bilateral discussion. These are matters that occur from time to time," she said.

"We have a good and constructive relationship based on mutual respect and engagement. If there were issues to be raised I'm sure we can address those."

Prime Minister Scott Morrison remained tight-lipped about the reports.

"The Government has always acted consistent with the advice that we've received and that's what has happened on this occasion," he said.

Mr Morrison highlighted laws banning foreign donations that came into force on January 1.

He said previous political donations had been accepted "in good faith", based on information known at the time, suggesting the Liberal Party would not return any of Mr Huang's contributions.

"We have prospective laws that deal with that into the future."

The property developer moved to Australia in 2011 before making his first political donation the following year — $150,000 to the NSW branch of the ALP during Sam Dastyari's time as party secretary.

Huang Xiangmo (second from left) with former prime minster Julia Gillard and former senator Sam Dastyari. ( Supplied )

Mr Huang was also president of a Communist Party-aligned body charged with promoting its interests — the Australian Council for the Promotion of the Peaceful Reunification of China.

One of his companies poured $50,000 into a fundraising organisation linked to former trade minister Andrew Robb, he paid $55,000 to dine with Federal Opposition Leader Bill Shorten, while Mr Huang also helped establish an Australia-China research body headed by former NSW premier Bob Carr.

Mr Dastyari's career as a Labor senator ended last year over his links to Huang Xiangmo and China:

Mr Dastyari allowed Mr Huang's Yuhu Group to pay a legal bill on his behalf

Mr Dastyari allowed Mr Huang's Yuhu Group to pay a legal bill on his behalf The politician repeatedly approached the then-immigration department about the citizenship application

The politician repeatedly approached the then-immigration department about the citizenship application Standing alongside the donor, he spoke against the ALP's policy on the South China Sea dispute ahead of the 2016 election

Standing alongside the donor, he spoke against the ALP's policy on the South China Sea dispute ahead of the 2016 election The former rising star reportedly warned Mr Huang his phone was probably being tapped by security agencies

Before the department's decision, the controversial figure lived in a mansion boasting Sydney Harbour views in the exclusive suburb of Mosman.

Mr Huang's lawyer would not say whether an appeal would be launched to challenge the decision and his spokesman refused to comment.

Mr Huang in 2017 denied having a relationship with the Chinese Communist Party.