Cambodia has permanently banned sand exports, officially ending sales to Singapore which has used it for years as part of its land reclamation.
Environmental groups said digging and dredging has had a serious impact on coastal ecosystems.
A temporary ban was imposed late last year, but campaigners allege dredging has continued.
Singapore has imported more than 72 million tonnes of sand from Cambodia since 2007, according to UN figures.
That figure conflicts with the Cambodian government's numbers, which say Singapore imported just 16 million tonnes in the period.
Essential for reclamation
Singapore has expanded its landmass by more than 20% since its independence in 1965, and considers reclamation a key strategy for accommodating a growing population.
Sand is essential to reclamation, but on recent projects Singapore has begun experimenting with techniques that would require less sand.
The country's reclamation projects are built by private contractors, who must adhere to sand import rules that include environmental protection measures.
A spokesman for Cambodia's Ministry of Mines and Energy, Meng Saktheara, said the new, permanent ban was in response to environmental concerns.
"Their worries are right that the risks are massive, so the ministry decided to ban sand exports and large-scale sand dredging," he said.
Other countries have previously imposed various types of sand export bans.
Malaysia imposed a ban on exports in 1997, while Indonesia announced a ban on exporting land sand to Singapore in 2007.
'Make a difference'
Environment groups are hopeful that the ban will put a stop to the trade, which they say has been causing environmental damage for years.
"I think it will make a difference. It will not be easy for the sand mining companies to continue exporting," said Alejandro Gonzalez-Davidson, an activist with the group Mother Nature.
Media and activist attention on the trade would now make it difficult for companies to flout the rules, he added.