The controversial project to build a cable car on kunanyi/Mt Wellington has been dealt a hammer blow, with Tasmania's planning authority ruling it failed to satisfy standards around noise, visual impact and biodiversity.

The Tasmanian Civil and Administrative Tribunal (TASCAT) upheld the Hobart City Council's decision to reject the project, leaving the proponent considering whether there is a path forward for the contentious plan.

The Mt Wellington Cableway Company had tried to appeal against the council's decision, with TASCAT considering a scaled-back proposal.

The updated plans reduced the footprint of buildings on the mountain summit and halved the number of people allowed to travel in the cable cars.

In its ruling, the tribunal upheld the council's original refusal, finding the project failed to satisfy 18 of 26 contested grounds for refusal.

Those grounds include the noise of the proposed cable car, its impact on the biodiversity of the mountain and the project's visual impact.

The cableway company has the option to appeal the decision again in court, but will have to wait two years before lodging a development application with the Hobart City Council for the same or a similar project.

Call to end cableway project forever

Residents Opposed to the Cable Car president Vica Bayley said he was "relieved and thankful" following the decision and called on the proponents to permanently shelve their proposal.

"This is a clear signal to the proponent, its shareholders and supporters to give up on their vision to privatise the mountain and abandon this, or any alternative cable car development," he said.

"We will always fight for the mountain and now work to restore some of the management protections that were amended, in vain as it turns out, to facilitate this development."

Tasmanian Aboriginal Centre campaign manager Nala Mansell said Aboriginal people were "overjoyed that kunanyi would remain protected today and into the future".

But she said Aboriginal cultural heritage values were not considered at all in the refusal of the proposal.

"Aboriginal people have a major spiritual and cultural connection to kunanyi and at the end of the day, the most important thing is that Aboriginal heritage is protected and respected.

"At the end of the day, we celebrate this victory; we're happy to see kunanyi will remain protected, but we also need to ensure that adequate heritage legislation is put in place to avoid the risk of destruction of Aboriginal heritage from proposals like this in the future."

Mount Wellington Cableway Company chair Chris Oldfield said he was disappointed with the decision, and the company would take time to consider the project's future.

"We need to get advice from our legal and planning advisers on the technical detail of the tribunal's determination," Mr Oldfield said.

"The tribunal's determination and its implications for the future of the project also need to be considered by our board and key shareholders."