The Green party had requested vote on introducing a speed limit of 130 kilometeres per hour to come into force on January 1st next year.
However, MPs voted against the move in the Bundestag on Thursday. A total of 498 MPs rejected the Green motion, while 126 were in favour of the speed limit. There were seven abstentions.
All members of the far-right Alternative for Germany (AfD) and the pro-business Free Democrats (FDP) parties rejected the bill.
The vast majority of the conservative parties (CDU and CSU) and the centre-left Social Democrats (SPD) voted against it too.
The CDU's Gero Storjohann warned against a “total surveillance of our Autobahn”.
Transport Minister Andreas Scheuer, of the CSU, had previously said the idea of imposing limits “defies all common sense”.
However, the Greens said the move would increase safety and be better for the environment.
“Anyone who wants to make motorways safer and traffic flow more smoothly must introduce a speed limit,” Green parliamentary party leader Anton Hofreiter told DPA before the vote.
The results also came under fire from the environmental group BUND. Deputy chairman Ernst Christoph Stolper said a speed limit is “an important step towards a safe and climate-friendly mobility of the future”.
The latest proposal has again triggered the heated debate over speed limits on Germany’s Autobahn system.
Some argue that putting a general speed limit in place, usually touted as 130km/h, would make roads safer and reduce carbon emissions.
However, for many people inside and outside Germany, the speed limit-free motorways are a strong part of the country's car-loving culture and history.
In a survey by The Local in May, Just over 70 percent of readers rejected the idea of imposing a general speed limit on the Autobahn network.
Meanwhile, the government already ruled out an Autobahn speed limit earlier this year.
Germany is the only country in Europe with no official speed limit on its motorways. However, about 30 percent of the Autobahn currently has a speed limit, according to Statista.
In Austria, Denmark, the Netherlands, France and the Czech Republic there is a 130km/h limit on the motorway network. Meanwhile, in Belgium and Switzerland, a 120km/h limit is in place.