Prime Minister John Howard, who has repeatedly expressed concerns over the deteriorating situation in the southern African nation, said his government had taken the decision out of Cricket Australia's (CA) hands.
Howard said it was not fair to leave foreign policy matters with sportsmen, preferring that his government accept responsibility for the tour. He urged other cricketing nations to follow suit.
"The government through the foreign minister has written to Cricket Australia instructing that the tour not go ahead," Howard told ABC television.
"We don't do this lightly, but we are convinced that for the tour to go ahead there would be an enormous propaganda boost for the Mugabe regime.
"The Mugabe regime at present is behaving like the Gestapo towards its political opponents, the living standards of the country are probably the lowest of any in the world and you have an unbelievable rate of inflation."
"I have no doubt that if this tour goes ahead it would be an enormous boost to this grubby dictator and whilst it pains me both as a cricket lover and as somebody who genuinely believes these things should be left to sporting organisations... it leaves me with no alternative."
Howard indicated his government would enforce the ban, if necessary, by stopping the use of the cricketers' passports to leave the country.
Cricket Australia chief executive James Sutherland said Sunday his organisation will assess the detail of the government's decision and may play Zimbabwe at a neutral venue.
"Given our commitment to help Zimbabwe cricket develop, we will now explore the possibility of playing the three one-day internationals we are due to play against Zimbabwe at a neutral venue outside Zimbabwe," he said.
Howard said his government has offered to reimburse CA for any losses under its agreement with Zimbabwe Cricket for not proceeding with the tour.
CA is facing a potential US$ two million fine from the sport's governing body if it abandoned the tour.
"I don't think it's fair to leave a foreign policy decision of this magnitude on the shoulders of young sportsmen."
"It's much better, in the end, for the government to take the rap."
"I hope the rest of the cricketing world understands that and it would be a very good idea if the rest of the cricket world adopted the same attitude towards Mugabe's regime."
"I'm not going to stand around and allow some kind of aid and comfort be given to him (Mugabe) by the greatest cricketing team in the world visiting his country."
Australia captain Ricky Ponting said he did not dispute the decision.
"I'm comfortable that the Australian government has taken the responsibility for making international affairs decisions on behalf of the country," Ponting said in a statement.
"As captain of Australia I've never had a problem playing against international cricketers from Zimbabwe."
The Zimbabwe tour has become a major topic of debate in Australia, with a majority of the public and church groups urging a boycott.
Howard, who has repeatedly urged Zimbabwe's African neighbours to do more to oust Mugabe, said it was difficult for countries such as Australia and Britain, viewed as the 'old, white west,' to interfere.
He said the recent election of Zimbabwe to head a key UN environmental commission was 'appalling' and "tells you something about the UN process."
Zimbabwe's ambassador to Australia Stephen Chiketa said last week politics has no place in sport and cancelling the tour would hurt cricket's development there.