Vitoon Kamolnarumet, adviser to the Federation of Thai Industries (FTI) in Khon Kaen, announced the cancellation.
He said the FTI was informed of the decision by Brain City Co, which is coordinating with Chinese investors to set up a green industrial estate on a 4,000 rai of land in Muang district.
The project had already approved by the Industrial Estate Authority of Thailand (IEAT) and was awaiting completion of an environmental impact assessment.
Brain City said it was unable to buy the land needed for the project because the price of land had inflated several-fold since purchase negotiations began in September last year.
Its Chinese backers were complaining about the delay and that the budget was exceeding projections.
Mr Vitoon said the cancellation of the development was not related to the political situation in Thailand.
Chinese investors had planned to put in around eight billion baht to create a green industrial estate for clean industries such as electronic parts and medical equipment with the support of the IEAT.
The cancelled estate plans included infrastructure for factories, educational institutes, an international college, hotel, hospital, convenience stores and a residential zone.
Mr Vitoon said the FTI still saw the potential in the development of a green industrial estate in the province and would continue to provide support to any investors.