South Korea's constitutional court has blocked a government plan to move the capital from Seoul to a new site.
President Roh announced the move earlier this year
The court said the move was unlawful because it first needed to be subject to a referendum.
The ruling was a big setback for President Roh Moo-hyun, who had campaigned for the move and argued it did not need to be put to a referendum.
Mr Roh and his supporters want a new capital to tackle Seoul's overcrowding and its dominance of the economy.
Twenty million people, or 40% of the population, live in or around the capital.
But the proposal to move it to a new location has been highly controversial, and eight of the nine judges on the constitutional court said the decision was against the law.
The court said that for the move to go ahead, the government first needed to amend the constitution or win a national referendum.
President Roh came to office two years ago promising to move the capital to a rural district in the centre of the country.
He gave the go-ahead in August for the $45bn construction project, and said the site of Yeongi-Kongju had been chosen.
But the main opposition party, which originally backed the plan, then changed its mind, saying it had thought the scheme would never get off the ground.
The BBC's Seoul correspondent, Charles Scanlon, says the relocation has been criticised as ill-conceived and too expensive.
Questions have also been raised about the timing.
Many believe the site of the capital will have to be reconsidered again if North and South Korea are reunified, our correspondent says.