State Resources Minister Scott Stewart says the company has withdrawn its application to renew two exploration permits near the town of Beaudesert, south of Brisbane.
"My department have accepted these withdrawal applications meaning these exploration permits no longer exist," he told parliament on Friday.
Arrow halted operations at the two leases a decade ago following an 18-month community blockade of its drilling sites.
The company quietly applied to extend the leases in 2018, and as part of those applications had to submit a plan for commercial gas extraction by 2033.
The Scenic Rim Mayor Greg Christensen, community groups, activists and state MP Jon Krause were deeply concerned when they found out about the applications earlier this year.
Mr Stewart spoke with Mr Christensen over Zoom two weeks ago about Arrow Energy's applications and promised not to make a final decision until they had met in person.
After Arrow withdrew the applications, the minister said the matter had been responsibly handled by all parties.
"I would like to place on record my thanks to all those who engaged with me in a respectful manner in relation to this matter, including Arrow Energy, the mayor of Scenic Rim Regional Council Greg Christensen, and the Member for Scenic Rim (Jon Krause)," Mr Stewart said.
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