Austria's Federal Administrative Court said in a ruling published late on Thursday that the "positive aspects of the project cannot justify the high extra carbon dioxide pollution."
A third runway would result in a "significant" rise in greenhouse gas output, contravening the country's domestic and international undertakings to reduce emissions, a statement said.
"The airport's possibilities to reduce CO2 emissions through its own measures (such as the installation of solar panels and changing its vehicles to electric cars) were insufficient," it added.
"As far as I know this is unique that climate protection is used as an argument to block a concrete plan," Christian Schmelz, a lawyer for the airport, told the newspaper Die Presse.
Erika Wagner, head of the Environmental Law Institute at Linz University, called it a "landmark ruling".
The airport, which handled 23 million passengers in 2016 and which has wanted to construct the runway for a decade, said it would appeal, possibly at Austria's highest court.