The line project, meant to connect the Italian city of Turin with Lyon in France, includes a 58-km (36-mile) tunnel through the Alps. It is fiercely opposed by 5-Star but supported by its coalition partner, the right-wing League, and by most other parties in parliament.
The upper house of parliament rejected the 5-Star’s motion by 181 votes to 110.
The 5-Star Movement is the largest party in parliament but it was outvoted by the combined forces of the League and opposition parties from the left and right.
Prime Minister Giuseppe Conte said last month that new financial offers from the European Union and France had made the infrastructure, known as the TAV, less costly for Italy, and it would now cost more to block it than to complete it.