Welsh-born Mr Terfel had been booked to open the controversial new building on St David's Day in the year 2000 by singing the title role in Wagner's "The Flying Dutchman".
But the failure of the opera house bid and pressure from other prestigious opera houses to sing with them has forced him to put the plans on one side.
It means his current project - singing the part of Nick Shaddow in a new Welsh National Opera production of Stravinsky's The Rake's Progress due to open in February - could well be his last for the company.
Mr Terfel confirmed his calendar was fully booked for the next seven years and that the Welsh National Opera now had no place in it.
"I'm very disappointed," he said, but added that, without the new opera house, the WNO simply did not have the theatre facilities to make it worth his while singing with them.
The singer's outspoken condemnation of the Millennium Commission's decision will further fuel the debate which has raged in the music world since Heritage Secretary Virginia Bottomley announced its rejection last month.
Supporters of the landmark project had been seeking around pounds 50m for a permanent home for the company, which celebrates its 50th anniversary this year.
In an outspoken interview for BBC Wales, Mr Terfel admitted he would now rather go to America, Europe or Covent Garden to take on some of the demanding Wagnerian roles.
The singer added: "The Met said that if plans for the new Welsh opera house don't come through, then we have something for you instead. So what am I supposed to do?"
The fastest rising singing success for decades, Mr Terfel, a farmer's son from Snowdonia, has already performed in most of the world's opera houses to huge acclaim.Reuse content