The airport complex is said to be the first private international airport in the country and is proposed to come up on an area of 700 acres.
The KGS Aranmula international airport has 500 acres in its possession.
The proposed airport is located about 110 km from Thiruvananthapuram and 30 km from the Sabarimala temple.
After the NGT verdict, the KGS group said it would take the legal route to appeal against the judgment.
The airport for the past four years has seen numerous tiffs between the ruling Congress and the opposition. Each of them blamed the other for giving the preliminary sanction for the proposed airport.
Welcoming the verdict, poet and green activist Sugathakumari said this is a victory for our lakes and forests.
"Glory to god for this verdict because the nature has been saved through this," said Sugathakumari.