Football Federation Australia, backed by Prime Minister Kevin Rudd, have been pushing for the 2018 finals as the nation is currently experiencing an unprecedented boom in the popularity of association football.
FFA's hopes received a boost yesterday with the signing of a landmark agreement with the Italian Football Federation, which would see the Azzurri fully support Australia's bid.
However, speaking at the FIFA World Congress in Sydney, Blatter quashed hopes of Australia 2018 by insisting the tournament is almost certain to return to Europe given the 2010 finals will be held in South Africa and the 2014 edition in Brazil.
"Definitely (the World Cup finals) will be (staged in Australia)," he said.
"But after the World Cup having been in South Africa and then in South America, 2018 will be very difficult after having been in the southern hemisphere.
"And to be far away, I think a (European) continental bid will be better. But in 2022 it is open."