The September state budget set aside $37 million to install a right-hand turn for trams travelling from King William Street onto North Terrace outside Adelaide's Parliament House.

But a report by independent engineering experts Aurecon found that installing the turn would create an "unacceptable" risk of derailment and increase the travel time for drivers.

The report also found that a further $70 million would be needed to purchase and operate trams that would be suitable for turning without risk of derailment.

Transport minister Stephan Knoll on Sunday announced that the government would not be proceeding with the plan.

"Good governments listen to expert advice and spend public money effectively," he said in a statement.

"We also have a responsibility to ensure our public transport system operates safely and does not unnecessarily cause traffic delays."

Australian Associated Press