Dublin City Council had granted SIPTU planning permission to demolish and rebuild on the historic site.
The proposed tower would have been 35% higher than Liberty Hall.
The board said that notwithstanding the quality of the architectural design, the scale and in particular the height of the proposed development would dominate the city's skyline and would be visually intrusive.
The board's inspector who examined the proposal said the case for demolishing Liberty Hall had been established but in its decision, the board said it did not necessarily concur with the inspector on this.
An Bord Pleanála also said that the proposed development would seriously detract from the setting and character of Custom House, and would intrude on O'Connell Street and Grafton Street architectural conservation areas.
SIPTU expressed its disappointment at the decision to refuse planning permission for the redevelopment.
SIPTU's General Secretary Joe O'Flynn said: "Given that the city council saw fit earlier this year to grant us planning permission for the redevelopment of Liberty Hall we are extremely disappointed that this decision has now been overturned by An Bord Pleanála."
The union said it will be studying the detail of the decision and the inspector's report.
Ian Lumley of An Taisce welcomed the decision, saying there was no justification for such an overscaled replacement.
In February, Dublin City Council granted the union planning permission for the new building subject to 19 conditions, including a further alignment of the north side of the building, particularly at the upper levels.
The union proposed building a heritage centre at the top of the building with a public skydeck accessible by a glass fronted sky lift.
A conference centre and theatre were also proposed, with 17 storeys of offices.
It was SIPTU's second proposal for the site.
Completed in 1965 on a site with historic links to 1916 Rising and the Lockout, Liberty Hall was Dublin's first skyscraper.
In 2006, SIPTU announced plans to demolish the building and rebuild on the site. The union said it was in need of serious upgrading.
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