The Hampshire force had decided to go for a new HQ at the Alpha Park site in Winchester rather than refurbish their existing building in the city.
But leaders of the police authority decided to dump that plan today at a meeting in Southampton.
Tender documents were on the verge of being handed out to contractors before the plug was pulled.
Hampshire’s headquarters will now remain at West Hill in Winchester despite complaints the building is “structurally unsound”.
Chief Constable Alex Marshall said: “Alpha Park was purchased two years ago, and since Hampshire Police Authority chose the new-build option in February of this year, the whole financial environment we operate in has changed.
“What has not changed is the police authority’s and my view that the existing police headquarters in Winchester is not fit for purpose and that it is becoming an increasing financial liability to maintain. This problem will not diminish over time and needs to be resolved.”