A proposed $3 billion Gold Coast casino resort development on the Southport Spit has been rejected by the Queensland Government, and a new master plan will be developed, following several months of community consultation.

Key points: Chinese company ASF's planned five-tower development rejected by State

Chinese company ASF's planned five-tower development rejected by State Master plan for Spit being redesigned, cruise ship terminal still slated

Master plan for Spit being redesigned, cruise ship terminal still slated Clubs, environmentalists opposed ASF's $3b project

Chinese consortium ASF had planned a five-tower development on crown land that included the casino, entertainment venues, theatres, hotels and residential apartments.

Premier Annastacia Palaszczuk met with the local council this morning, saying they could continue to plan for a possible cruise ship terminal on the oceanside of The Spit.

Ms Palaszczuk however said the area should be preserved, adding height restrictions would be maintained around the council's current three-storey limit.

"This will be a central parkland of the Gold Coast for future generations of families to enjoy," she said.

An artist's impression of the ASF mega casino resort planned for The Spit. ( Supplied: ASF )

"This part of the Gold Coast is unique to Queenslanders but it's also unique in the world."

ASF was the preferred tenderer for a second casino on the coast to rival The Star at Broadbeach which is planning an expansion.

It proposed the development would create 13,000 jobs and inject more than $700 million into the local economy.

A boulevard envisioned by ASF Consortium. ( ASF Consortium )

Back to the drawing board for the Spit

Ms Palaszczuk said Cabinet decided to terminate the plan on Monday and create a master planning process for the Spit parklands.

"So we're talking about 190 hectares," she said.

"That does not preclude people from developing on that particular area of the Spit, and in relation to the oceanside cruise ship terminal we want the council to continue their work."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 7 seconds 1 m 7 s An aerial view of the Gold Coast Spit ( Supplied: Westpac Little Ripper Life Saver Drone Footage )

Some environmental and community groups — including Save Our Spit led by former Labor minister Judy Spence — had campaigned against The Spit development, for its potential impact on local clubs, residents and wildlife.

Clubs Queensland, which represents the state's licensed clubs, was also opposed to the proposal.

Gold Coast mayor Tom Tate said the Premier broke the news to him "gently", and it would be up to ASF to decide if it would invest elsewhere on the coast.

Ms Palaszczuk (left) looks at plans with officials for The Spit. ( ABC News: Josh Bavas )

He said the council would look for other ways to create jobs on the Gold Coast.

"It'll be more coming from education, medical and our Gold Coast health and knowledge precinct," he said.

"We have to think ahead and shape our economy and broaden it."

Ms Palaszczuk (centre) and Ms Trad announced the changes on the Gold Coast. ( ABC News: Josh Bavas )

Save Our Spit alliance head Steve Gration said he was not against the development of another casino on the Gold Coast if it was in an appropriate place.

"There will be a great portion of Gold Coasters who will be cheering, and the economic jobs doomsday conspirators will be saying it's the death of the Gold Coast if we don't have a casino on the spit," he said.

"We've always said that there may be a possibility of an integrated casino resort somewhere on the Gold Coast.

"We accept that there might be another licence given, as long as it's in an appropriate place and the community around that area supports it."