Surrogacy agencies started springing up in the Southeast Asian nation after former hubs like Thailand and India blocked foreigners from the services following a flurry of scandals and concerns about exploitation.
With cheap medical costs and no laws excluding gay couples or single parents, Cambodia quickly absorbed much of the demand.
But a government edict sent to Cambodian fertility clinics and seen by AFP today said that surrogacy was now "absolutely banned".
Phon Puthborey, spokesman for the Ministry of Women's Affairs, said the government was working on other regulatory schemes to prevent rights abuses in the controversial industry, which is outlawed is most countries.
More From This Section
"This is a transitional period because we have not had a law on surrogacy," he said.
"We are looking for (other) possible measures to respond to the matter effectively. It could be a surrogacy law that includes protections for women and children so that they would not become victims of trafficking," he added.
"This sudden change does no favours to surrogates or children given the lack of information and lack of clarity," he said.
Cambodia now boasts some 50 surrogacy agents, a number of which cropped up in the past year, according to Everingham.
"It was an industry that grew very quickly," he said, adding that Cambodia had become the "last hope" for many couples that would have previously sought services in neighbouring Thailand.
In one controversy, authorities discovered nine babies in a Bangkok apartment that had been fathered by a Japanese man using Thai surrogate mothers.