Houston said he wasn't aware of plans for an invite from Prime Minister Scott Morrison in the first place.
"Hillsong Church received no inquiry from any party as to my details or availability. As far as I'm concerned this is baseless rumour and totally false news," he said in a statement.
"It is extremely disappointing that media outlets spread these unfounded rumours, and attempts to link this untrue story to the royal commission are unconscionable."
His statement comes after the Wall Street Journal reported that Mr Morrison asked the White House if the pastor could be a guest at the state dinner, which happened on Friday night.
The Wall Street Journal reported that the White House declined the prime minister's request.
According to The Guardian, when Mr Morrison was asked by travelling reporters if he tried to get Houston a seat at the dinner he dismissed the claim as "gossip".
"I don't comment on gossip. It's all gossip."
The Wall Street Journal linked the alleged denial of the Houston at the dinner to a royal commission into child sex abuse claims.
The 2014 investigation found that Hillsong Church, then led by Houston, failed to report to police about accusations that Frank Houston, Brian's father, had sexually abused children.
It was revealed that Frank Houston abused up to nine boys in the 1970s and 1980s in Australia and New Zealand. He never stood trial and died in 2004.
At the conclusion of the investigation, Brian Houston said in a statement: "I have shared that when I first found out about this, I immediately confronted my father and ensured he never preached or served in any ministry capacity again. There was no delay in action - from the moment we knew and he confessed, his ministry stopped.
"Be assured that we did not tolerate sexual abuse when we heard of these allegation in 1999 – and we don't now. Hillsong Church has zero tolerance for abuse."
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