The pipe would be an addition to the sewage treatment plant that is already being rebuilt after being flooded by 9 feet of water during Superstorm Sandy in 2012.
FEMA's decision will most likely force the county to look elsewhere for the desired funding.
The county is seeking $690 million to construct an ocean outfall pipe.
Nassau officials held their first public hearing on a nearly $1 billion plant repair project this week.
The money will pay for elevating substations and placing some power lines underground, officials said.
“They submitted false claims to FEMA and lined their pockets with money."