The decision deals a blow to a booming industry, developers said, as the centre was to generate thousands more jobs in a city hit with staggering unemployment.
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Abdurrahman Kawu Sumaila, an adviser to President Muhammadu Buhari, said the cancellation answered the wishes of the local population.
"The people have had their say and the government has heeded them," he told reporters last week after months of discord.
The project, to be built on a 20-hectare (nearly 50-acre) expanse near Kano, planned for a film center, a 400-capacity auditorium, a hostel, a sound stage, a restaurant, a three-star hotel, a shopping mall, a stadium and a clinic.
Salafist clerics blasted it in Friday sermons, saying it would promote immorality and undermine Islamic values.
"We don't want it, we don't need it, they should take it somewhere. We will continue to curse the people behind this film village," said Abdullahi Usman Gadon-Kaya, who spearheaded the protest.
Joined by critics on local radio and the social media,they drowned out those in favour of the film village.
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Danjuma Wurim Dadu of the Nigerian Film Corporation had told a film conference in Kano that more than $3 million had been set aside for the centre, which he said was to create 10,000 jobs.
It aimed to boost the massively popular local film industry known as "Kannywood", which, according to the national film censors agency, accounts for 38 percent of film production in Nigeria -- a country that already turns out the second highest number of films per year worldwide after India's Bollywood.
"This is a missed opportunity to provide much-needed jobs for the teeming unemployed youth, who have turned to drugs for solace", local film analyst Mudan Saidu told AFP.
Film producer Sani Muazu said the project would have helped improve film quality and generate further revenue by boosting production of top-quality television commercials.
Kano's economy had a thriving textile industry in the 1980s but started declining due to electricity shortages, high lending rates and competition from cheap imports.
The downturn forced more than 400 of Kano's 500 factories to close, leaving thousands without work and Kano with the highest unemployment in the country, according to the National Directorate of Employment.
The advent of "Kannywood" -- named after Kano -- offered a new source of jobs.
It started in 1992 with seven production companies, and expanded over the next decade to 268 production outfits and 315 editing studios, employing more than 60,000 people, according to the Motion Pictures Practitioners Association of Nigeria (MOPPAN).
Nigeria is well known for its "Nollywood" video production which churns out about 200 films a month in the country's educated and urban south. Shot in English as well as the local Yoruba and Igbo languages, they are popular throughout west Africa.
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The northern Kannywood has huge appeal among the 60 million Hausa speakers, a language widely spoken across west Africa.
In its 2010 report, the World Bank estimated that Nigerian film industry overall was generating $1 billion a year to the economy.
But Muslim clerics have kept close watch on Kannywood, accusing it of promoting un-Islamic foreign values by imitating American Hollywood and Indian Bollywood movies, a charge film makers have denied.
While Nollywood and Kannywood focus on similar themes -- love, romance, black magic and betrayal, the Kano-made films follow a strict code in which men and women do not touch and actresses respect the reputation of women in traditional Islamic society.
In 2008, a sex video involving a popular Kannywood actress in Kano gave clerics the ammunition they needed against the industry.
The video, filmed two years earlier on a cellphone during a private tryst, was never intended for public distribution but got onto the cellphone circuit, causing an uproar from clerics and prompting a six-month government ban that cost the industry $29 million in lost revenue.
Mutual resentment between the clerics and film makers has grown since.
The film village, named after President Buhari, was initiated by Abdulmumin Jibrin, a lawmaker representing Kano in the House of Representives in Abuja.
But Jibrin has been accused of unilaterally inserting the project in the budget without the approval of either the president or the house.
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