Despite months of diplomatic efforts to come up with a solution, Mr Rutte told Dutch MPs on Thursday: "I think that ultimately we will not ratify [the trade agreement]," Censor.NET reports citing the Financial Times.
All EU trade deals must be ratified by national governments before officially coming into force, meaning that the long-term viability of the controversial deal with Ukraine is in doubt, unless a compromise is found.
Mr Rutte expressed some optimism that the deal could carry on without the Netherlands, just involving the EU's remaining 27 member states and Ukraine.
Dutch voters voted against the deal by a margin of two-to-one in a referendum in April, albeit on a low turnout, leaving Mr Rutte little room to manoeuvre domestically.
But the significance of the deal means that the Dutch government will face intense pressure from both Brussels and Washington to overcome doubts from voters.
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