The landmark cathedral in the city centre was badly damaged in the 2011 Canterbury earthquakes.
The Christ Church Cathedral Reinstatement Project requested the money from the government to help plug an $85 million project shortfall.
Last week, Christchurch mayor Phil Mauger told RNZ central government would need to "come to the party" if the cathedral rebuild was to be completed.
Earlier this year, the Anglican Church warned that work on the project could stop, as costs blew out to almost $250 million, leaving a $114 million budget shortfall.
The gap was reduced to $85 million after an agreement to lower seismic strengthening and scrap some elements of the original plan.
Finance Minister Nicola Willis confirmed today that the government would not step in with any further taxpayer funding.
"The Crown has already provided a significant $25 million fiscal contribution to the reinstatement of the cathedral. We also provided expedited consenting for the project.
"The requested amount of at least $60 million more would have been a significant contribution for a project that is not owned by the public, and where public use would be limited due to the cathedral being a private, religious space."
The government appreciated the progress that Christ Church Cathedral Reinstatement Ltd and the Christchurch Property Trust had made to date in achieving stabilisation of the cathedral, as well as their efforts to rein in rising costs, Willis said.
"We understand and regret that this may not be the news they were hoping for."
At a Christchurch City Council meeting on Wednesday, Heathcote Ward Councillor Sara Templeton called for the city council to delay the release of the remaining $7 million of a $10 million grant to project managers.
Mauger is China on a sister cities visit.
Acting mayor Pauline Cotter said the announcement the government would not be contributing any more money must be disappointing for Christ Church Cathedral Reinstatement Limited.
She said this would also have an impact on the square and surrounds, and private investors who had invested in the central city.
Christ Church Cathedral Reinstatement Limited chairman Mark Stewart said the government's decision was "incredibly sad and disappointing".
"As a board we need time to consider the implications of the coalition government's decision .... the pathway to completion is much longer and mothballing is now likely."
Stewart said the board would meet on August 19 to look and its options - and further announcement will be made that week.
"This week the Christchurch City Council agreed to fulfil its commitment to release $7 million it had already collected from a targeted rate towards reinstatement. We have asked council to pause this funding until a decision has been made on the pathway to completion.
"This is a sad day for Christchurch. With the final anchor projects now being completed alongside significant private and civic investment, Christchurch is enjoying a wonderful renaissance as a modern and vibrant city.
"Completing the reinstatement of the city's iconic cathedral in the very heart of the city in Cathedral Square would be a very fitting capstone to this."
