The proposed development at Ħondoq ir-Rummien could be affected by the planning authority's decision to register the site as part of a bigger marine protected area.
The area, spanning the northeast coast of the two islands, will be protected because it harbours a large amount of Posidonia oceanica seaweed, host to a range of biological life.
The authority's environment protection director, Martin Seychell, said any proposed development would now have to be subject to an appropriate assessment. If it was established that it would harm the natural habitat - in this case the seaweed - the project would not be allowed to go ahead unless there was overriding public interest at stake.
In the case of Ħondoq, this overriding public interest did not apply and the developers "would have to prove beyond doubt that the development will not harm the seabed," Mr Seychell said.
The €120 million development, a touristic and residential complex planned in a disused quarry and including a marina, has led to criticism from environmental NGOs and residents and was more recently slammed by the Church's Environment Commission.
Tourism Parliamentary Secretary Mario de Marco had said authorities could not afford to make any mistakes over the proposal to develop the pristine bay in Gozo. Ultimately it was a matter of weighing the advantages a marina may have against the impact on the environment of the specific locality where it was proposed, on marine life and the adjacent bay.
The area of Ħondoq falls under one of four new protected areas covering 18,000 hectares of marine environment, primarily identified to protect 80 per cent of Posidonia oceanica seaweed, known as Neptune's sea grass and perhaps less affectionately as alka by the Maltese.
Malta Environment and Planning Authority officer Christopher Cousin said that while the designated areas would enjoy a high degree of environment protection, this did not mean all activities happening or proposed to occur there would automatically be prohibited.
"It means that any proposed activity will have to be assessed in terms of the likelihood and significance of its impact on the biodiversity for which the site is protected."
Simpler activities such as swimming or rod fishing in marine protected areas will not be affected.
Other established legal activities in the area, such as fish farms, would be considered as stakeholders, and Mepa will be holding discussions with these parties to see how to best manage the sites.
Mepa has already suggested that fish farms be moved as far out from the shore as possible, Mr Seychell said.
In the future, these sites will also be managed, which could provide the key to start the reintroduction of species, such as the common turtle, without causing any harm.
Dr de Marco yesterday said this could also be a step to create more "green jobs" in site management, as well as preserve the country's marine heritage, which attracted more than 60,000 divers a year.
Malta's largest expanse of Posidonia is found along the northeast coast extending up to Gozo. This 15,519-hectare stretch of seabed has been protected, along with three smaller sites at Mġarr ix-Xini, Dwejra and an area between Għar Lapsi and Filfla, adding up to 18,000 hectares.
Posidonia is given special importance by the EU as it is in danger of disappearing. This habitat provides food and shelter for a large number of marine species, acts as a carbon sink and as a nursery to a lot of fish commonly caught in Maltese waters.
Mr Seychell said it was natural for the authority to extend its protection from land to sea, as the island's territory was 95 per cent sea, and it was also its duty to safeguard such a large part of the natural heritage.
The first marine Natura 2000 site in Malta was designated in 2008 when the authority granted protection status to the coastline along the area off the northwest coast of Malta, between Rdum Majjiesa and Ras ir-Raħeb.