This creates a hole about the size of Belgium, and is a 15% increase on the previous year.
The government had hoped that forest clearance was decreasing, but satellite images analysed by its Space Research Institute reveal that between 1999 and 2000, almost 20,000 sq km were cleared.
This creates a hole about the size of Belgium, and is a 15% increase on the previous year.
The secretary for Amazon affairs for the Environmental Ministry, Mary Allegretti, blamed the increased deforestation on an improved economic climate.
Demand for land
An unexpectedly healthy recovery from Brazil's recession, following the devaluation of its currency in January 1999, sparked more demand for timber and land.
Ms Allegretti said the rain forest was cut down by logging companies and farmers in search of land.
Independent research institutes forecast that if the government continues with its road building and farming programmes in the Amazon region, up to 40% of the total rainforest will be destroyed within 20 years.
Environmentalists say action needs to be taken to reverse the unsustainable destruction of the Amazon, which is home to up to 30% of the world's animal and plant life.
"The beginning of the new millennium could not have been worse for the Amazon, the figures are worrying if we look to the future," said the World Wildlife Fund in a statement.
Ms Allegretti said the government would introduce a licensing system for properties where deforestation was worst.
Government action
But our correspondent Jan Rocha says that within the next two weeks a controversial bill which would allow Amazon farmers to legally clear much greater areas of forest will be debated in Congress.
The bill is supported by farmers and opposed by environmentalists, she says.
The government is also considering building more energy plants in the area, as the country is suffering from a chronic energy shortage.
In 1970, about 99% of the Amazon, which is sometimes termed the "lungs of the planet", due to the huge amounts of oxygen produced by its trees, was still standing.