Headed by Chancellor Angela Merkel, the German Federal Security Council denied Pakistan's request for supply of air independent propulsion (AIP) systems for its submarines.
According to a report by Hindustan Times, quoting anonymous sources, said the German panel's decision was conveyed to Pakistan in the first week of August.
Germany's decision to turn down the latest request by Pakistan is believed to be related to the 2017 truck bomb attack on the German Embassy in Kabul in which about 150 people were killed.
The Haqqani network, a terrorist group known to have the backing of certain elements within the Pakistani deep state, was blamed for the attack.
The AIP system would help Pakistan modernise its submarines as the technology allows non-nuclear (conventional) submarines to operate without having to surface for atmospheric oxygen for about a week.
Conventional, diesel-electric engine submarines have to frequently come up to the water surface to recharge their batteries, thus reducing their underwater endurance time.
While India is yet to adopt and transition to AIP systems, the Defence Research and Development Organisation (DRDO) is already working on indigenously developing the technology to equip the naval submarines.
