Australian on Friday knocked back the sale of the country's biggest private landowner, cattle firm S. Kidman and Co., to a Chinese-led consortium citing national interest.

The grouping of Chinese-owned Dakang Australia Holding and ASX-listed Australian Rural Capital (ARC) was the preferred buyer with an offer worth more than Aus$370 million (US$283 million).

But Treasurer Scott Morrison told reporters the proposal was "contrary to the national interest", adding that the decision was preliminary and consortium had until Tuesday to respond.

The government had already halted the sale of Kidman to foreign entities last year, ruling it was not in the national interest given that part of its land was in a weapons testing area.

As a result, the Anna Creek station in South Australia, which is next to a rocket testing range, was separated out and no longer included in the deal.

Kidman has attracted keen interest from Chinese firms wanting to secure the sprawling pastoral empire and the consortium committed to make a takeover offer for 100 percent of its stock at Aus$31.38 per share.

The takeover bid, backed by Kidman, involved Dakang Australia acquiring 80 percent and ARC 20 percent, with the partners jointly overseeing the management of the business.

"Given the size and significance of the Kidman portfolio I am concerned that the acquisition of an 80 percent interest ... may be contrary to the national interest," Morrison said in a statement.

The proposal comes at a time of growing concerns about valuable agricultural and mineral assets passing into foreign hands.

"Government welcomes foreign investment where it is consistent with our national interests," Morrison added.

"However, we must always ensure it is on our own terms. There are not too many jurisdictions anywhere in the world where foreign acquisition of large holdings would be permitted."

Dakang Australia is 51-percent owned by a subsidiary of Hunan Dakang Pasture Farming, whose major shareholder is Shanghai Pengxin Group, while 49 percent is held by the unlisted Shanghai CRED Real Estate Stock.

The consortium has said the purchase would increase production and expand international markets for Kidman's beef.

Kidman, founded in 1899, holds around 1.3 percent of Australia's total land area, and 2.5 percent of the nation's agricultural land. Even without Anna Creek it represents two percent of agricultural land.

It is a key source of beef for export to Japan, the United States and Southeast Asia.