The formal rejection by the Libyan prime minister, Fayez al-Sarraj, is a blow to Italy, which is regarded as being close to his Tripoli administration.
In June, Italy proposed reception and identification centres in Africa as a means of resolving divisions among European governments.
The impasse came as the EU said it was willing to work as a temporary crisis centre to oversee the distribution of refugees and migrants from ships landing in Europe from Libya. Italy has said it is not willing to open its ports and may even reject those migrants rescued in the Mediterranean Sea, a position that has infuriated other EU states.
Speaking to the German newspaper Bild, Serraj said: “We are absolutely opposed to Europe officially wanting us to accommodate illegal immigrants the EU does not want to take in.”