Double Island lies 1.5 kilometres off the coast of the beachside suburb of Palm Cove, 30 minutes north of Cairns, and was once frequented by Hollywood actors Jennifer Aniston and Keanu Reeves.
The 17.8-hectare island's resort has fallen in to such a state of disrepair, the Queensland government has given its Hong Kong-based billionaire owner Benny Wu an ultimatum to bring the facilities up to scratch and open the island up to the public.
The March deadline has now expired, prompting calls from tourism bodies to strip Mr Wu of his lease.
Photographs supplied to the ABC show safari-style tents covered in mould, plastic chairs strewn about and a once-sparkling pool drained of water save for some green sludge at the bottom.
Member for Cairns and Assistant Tourism Minister Michael Healy said the government had "run out of patience" with Mr Wu, who bought the island for $5.68 million in 2012.
His company, Fortune Island Holding Company, signed a lease on the island until 2099.
"They were going to spend money on it and maintain this iconic asset," Mr Healy said.
"It is a world-class tourism opportunity and it's extremely disappointing it's been left in such a state."
In a statement, the Department of Natural Resources said Mr Wu had provided a condition report, as requested.
"The Department will now consider the report to determine if the lessee has taken substantial steps towards meeting the conditions of their lease and opening the tourism resort," the statement read.
Local businessman Tony Richards said he had a long association with the island.
"When it was taken over in 2012, it was a thriving business," Mr Richards said.
"Nothing has been done to it since then, not a single improvement made.
"It is a boutique island, superbly located, just 1.5 kilometres from the mainland and close to the international airport.
"It had so much potential. Now it's a complete bulldoze job."
The ABC has contacted Mr Wu for comment.
