An Australian court on Wednesday revoked approval for an Indian-backed project to build what could be one of the world's biggest coal mines, which environmentalists say threatens the World Heritage-listed Great Barrier Reef.

While environment groups hailed the decision as another important step in the Aus $16.5 billion ($12.1 billion) project's eventual demise, Indian firm Adani insisted it would go ahead.

"With the consent of the parties, the federal court has formally set aside the approval of the Carmichael Coal Mine and Rail Project," Australia's Environment Department said in a statement.