ReGen Waste has withdrawn its application for a waste plant to be developed at Warrenpoint Harbour.
Sinn Féin's Chris Hazzard MP welcomed the announcement after concerns were raised that any proposed facility on Carlingford Lough would have been hugely detrimental to the delicate ecosystem in the local area.
Mr Hazzard said: "This decision will be welcomed by all sections of society connected to Carlingford Lough and much further afield also.
"I want to thank all those community & environmental activists who campaigned to bring these proposals to such a conclusion. Their dedication and commitment to protect the sensitive environment surrounding Carlingford Lough is testament to the strength of character in our local area."
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