The request to explore the seabed in Estonian commercial waters was made in May following protests by Finland, whose waters the German-Russian pipeline was initially planned to cross, over high environmental risks to its shelf.
"Considering Estonian sovereignty in its territorial waters and state interests in its commercial waters, the government rejected Nord Stream's request to conduct research on Estonia's seabed," the press service said.
The company has made no comment so far on the decision by Estonia.
The ambitious Nord Stream pipeline, designed to transport Russian natural gas to northern Europe, is estimated at around $12 billion and is scheduled to be completed in 2012.
Russian energy giant Gazprom holds a 51% stake in the project, with German partners BASF and E.ON. owning 24.5% each.
