Politician Simcha Rothman has denied children have been dying of hunger in Gaza, despite overwhelming international evidence, and branded them "our enemies".
Mr Rothman has also pushed for Israel to annex the West Bank and denied a Palestinian state should exist.
He defended the mass displacement of Palestinians from Gaza, which is illegal under international law, and refused to allow those fleeing the war into Israel, saying "you don't let them conquer your country".
Home Affairs Minister Tony Burke said Australia "will be a country where everyone can be safe and feel safe".
"Our government takes a hard line on people who seek to come to our country and spread division," he said in a statement.
"If you are coming to Australia to spread a message of hate and division, we don't want you here."
The right-wing Australian Jewish Association said the visa cancellation on the day Mr Rothman was set to leave "was spiteful" after it had initially been granted.
The purpose of Mr Rothman's visit was to show solidarity with Australia's Jewish community, which is facing a wave of anti-Semitism," CEO Robert Gregory said in a statement.
"AJA had arranged for him to meet with victims, visit targeted Jewish institutions, and address numerous Jewish schools and synagogues."
Mr Gregory also criticised Mr Burke for denying entry to former Israeli minister Ayelet Shaked and Israeli advocate Hillel Fuld.
The minister blocked Ms Shaked's visa based on anti-Palestinian comments.
Briefing materials provided for Mr Burke on Ms Shaked's visa provided numerous examples of her rhetoric, including her calling Palestinian children "little snakes" and pushing to turn a Palestinian settlement in Gaza into a soccer field.
Mr Fuld had compared Gazans to Nazis, said not all Palestinian children were innocent and dismissed violence from Israeli settlers against Palestinians.
Australia has further sanctioned two far-right Israeli ministers, including travel bans.
But Mr Burke has also denied entry to people who have a history of anti-Semitism, including rapper Kanye West after he released a song praising Hitler.
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