In the latest instalment of the saga, Balfour said the offer failed to address again concerns over the sale of US consultancy Parsons Brinckerhoff and risks associated with reducing the UK construction arm.
"..the board has unanimously concluded that the proposal is not in the best interests of its shareholders and has decided to reject the proposal.
"Therefore the board will not be seeking an extension to the PUSU (Put Up or Shut Up) deadline of 5pm on 21 August 2014," it told the regulatory statement.
Balfour added that it would "remain open" to strategic value creating opportunities across the group while it concentrates on the restoration of value to its shareholders.
Yesterday, Carillion put forward a sweetened deal, which offered Balfour shareholders 58.3% of the combined company - up from a previous 56.5%.
Carillion has previously said a union could reduce the group's cost base by at least £175mln a year.
But Balfour said the combined group would be of a significantly larger scale and diversity than the Carillion management team has previously managed, with annual revenues of around £14 billion and around 80,000 employees, excluding joint ventures.
It added that Carillion's proposed retention of Parsons Brinckerhoff (which Balfour wants to sell) exacerbated the scale of the challenge at a time when the management team would be undertaking a fundamental downsizing of the UK construction business.
Balfour also claimed that Carillion's proposals would reduce revenues at its UK construction arm by two-thirds.
This division generated £2.8bn of revenue in 2013 and Balfour Beatty claims a "significant reduction in overheads" would, therefore, be required in order to maintain profit margins at the business.
The implementation programme would be complex, requiring simultaneous business restructuring, integration and outsourcing, it has said.