Australia has outlawed uranium sales to India because Delhi has not signed the nuclear Non-Proliferation Treaty (NPT).
Australia has 40% of the world's known uranium reserves
Foreign Minister Stephen Smith said the move fulfilled the new Labor government's election promise.
The move reverses the policy of former Prime Minister John Howard, who was voted out late last year.
Australia has 40% of the world's known uranium resources and exports the product to more than 30 countries under strict conditions.
In 2007, Mr Howard's government overturned a long-standing policy of not selling uranium to countries outside the NPT when it made a deal with India.
MAJOR URANIUM PRODUCERS
Mr Howard agreed in principle to sell the nuclear fuel to India, pending successful negotiations on the conditions.
Mr Howard defended the move at the time by saying that it would bring India into the nuclear mainstream and curb its fossil fuel emissions.
But Mr Smith told India's nuclear envoy Shyam Saran, who had negotiated the deal with Mr Howard, that the original policy had now been reinstated.
"We went into the election with a strong policy commitment we would not export uranium to nation states who are not members of the nuclear Non-Proliferation Treaty," said Mr Smith.