Foreign Minister Bob Carr said today that the hermit kingdom's proposal, which he initially supported, is no longer going ahead.
"This is in response to their recent nuclear test," quoting Carr's spokesman, AAP news agency reported today.
"It would among other things allow us to communicate more directly with them on human rights. But it is in abeyance until further notice while we work in the United Nations Security Council on the response to North Korea's recent nuclear activity," the spokesman said.
North Korea closed its Australian embassy in 2008 due to financial pressures.
However, the latest move from Australian government has come after Kim Jong-un's regime successfully tested a third nuclear weapon.