In a letter that Navalny posted on his website on March 18, a city official said the planned march and rally in central Moscow would hamper traffic and infrastructure and violate the rights of residents.
The Interfax news agency quoted a senior city security official, Vladimir Chernikov, as saying that the decision to deny permission at the requested location was "final."
Navalny on March 14 filed an application to hold a march down Moscow's main street culminating in a rally near the Kremlin -- with up to 15,000 people attending -- one of 53 demonstrations planned for that day.
Chernikov, head of the regional security and anticorruption unit for Moscow, said organizers could not "ensure their events would be held in a timely and secure manner" with so many demonstrations planned for the same day.
Navalny, a prominent anticorruption campaigner and foe of President Vladimir Putin, announced in December he will run for president in a March 2018 election in which Putin is widely expected to seek a fourth term.
He has reported difficulties in several incidents related to his activities.
A campaign event scheduled in Tomsk on March 17 was halted by authorities, who claimed the venue had to be evacuated because of a bomb threat.
Navalny said the move was "ridiculous" and blamed "idiotic authorities" for forcing him to stop the event.
Navalny also faced a series of obstacles when he opened his campaign headquarters in the Volga River city of Nizhny Novgorod on March 6.
Navalny wrote on Facebook that protesters met him at the city's railroad station holding placards suggesting he was a traitor and should be jailed. Some chanted "Navalny is a U.S. agent!"
Russian authorities say Navalny will be barred from the ballot if a conviction on financial-crimes charges is upheld on appeal, but he has pushed ahead with campaign-style events.
He has denied any wrongdoing and said his convictions in two separate cases were politically motivated punishment for his opposition to Putin.