The trial called PAVE 100 has been abandoned following advice from a top scientist that it was unlikely to give useful results.
According to the National Institutes of Health (NIH) the trial which would have involved 2400 men in the US, was cancelled because of cost and also because of its similarity to a failed Merck product.
Like the Merck vaccine the latest one relied on a version of a common cold virus to trigger a response from the immune system to keep the HIV infection in check rather than prevent infection.
The new vaccine was developed by the Vaccine Research Center at the National Institute of Allergy and Infectious Disease and director Dr Anthony Fauci rejected the plan and called for a smaller, more focused clinical trial that would cost less than $45 million.
He says if that trial proves successful, then additional studies could be carried out.
The new vaccine was developed by Dr Gary Nabel of NIH, who used strains from around the world to spark immunity, but also used the cold virus Adenovirus-5 - his was the culprit responsible for the failure of the Merck vaccine test.
This latest casualty in the fight against AIDS is not the first as many potential AIDS vaccines have been studied, but only two have made it to large-scale trials, and both have failed.
A study of 4,500 North American and European volunteers found that a vaccine produced by Vaxgen, a Brisbane company, provided no protection against infection by HIV.
About 33 million people in the world have the AIDS virus, and 2.5 million new infections occur each year and the decision to abandon the trial represents the latest major obstacle in the development of an HIV vaccine.
Dr. Fauci says that it is becoming evident that more fundamental examinations and animal testing would be needed before a HIV vaccine was ever marketed.
Experts say developing a vaccine against HIV is one of the most complicated scientific endeavors in history because of the unexplained nature of the virus.
