The Government of Japan has rejected controversial plans for the $2bn national stadium in Tokyo, which was designed by Iraqi-British architect Zaha Hadid.
Initially approved in 2012, the plans were subjected to significant modifications due to protests over the design and cost.
In addition to hosting the 2019 Rugby World Cup, the stadium will also be the centrepiece of the 2020 Tokyo Olympics.
Japan Prime Minister Shinzo Abe was quoted by The Guardian as saying: "We have decided to go back to the start on the Tokyo Olympics-Paralympics stadium plan, and start over from zero.
"I have been listening to the voices of the people and the athletes for about a month now, thinking about the possibility of a review.
"We must go back to the drawing board. The cost has just ballooned too much."
The decision immediately sparked concerns that the stadium would no longer be able to host the 2019 Rugby World Cup final; however, Abe told reporters that the decision was made only after receiving reassurances about completing the new grounds before 2020 Olympics.
Zaha Hadid Architects (ZHA) said: "Our teams in Japan and the UK have been working hard with the Japan Sports Council to design a new national stadium that would be ready to host the Rugby World Cup in 2019, the Tokyo 2020 Games and meet the need for a new home for Japanese sport for the next 50 to 100 years.
"It is not the case that the recently reported cost increases are due to the design, which uses standard materials and techniques well within the capability of Japanese contractors, and meets the budget set by the Japan Sports Council.
"The real challenge for the stadium has been agreeing an acceptable construction cost against the backdrop of steep annual increases in construction costs in Tokyo and a fixed deadline."
Image: The original design plan for the Tokyo national stadium. Photo: courtesy of The Japan Sport Council.