According to the minister, at a meeting on January 24, the Malaysian cabinet decided to terminate the project because if continue, Malaysia would have to pay around 500 million RM (over US$120 million) each year for the interest.
The finance ministry will determine how much to pay CCCC for the project cancellation fee, he said.
Earlier this week, the Malaysian government had laid down a maximum cost of 40 billion RM (nearly $10 billion) instead of $20 billion said previously and asked for more local products and services to be included in the works.
However, CCCC could not accepted these proposals, resulting in negotiations coming to an end.
In 2017, CCCC won the construction of 620 km ECRL project connecting Malaysia's underdeveloped East Coast area to Kuala Lumpur and Thailand. 85 percent of the cost of this project was covered by Export-Import Bank of China.
The project was officially launched in August 2017.
