The deal has faced tough opposition from consumer groups and No. 3 carrier Sprint since it was announced in March.
AT&T could challenge the Justice Department's action in court.
A failure of the deal puts T-Mobile in a difficult position. It's struggling to compete with the larger carriers, and owner Deutsche Telekom AG has said it's not willing to invest more in the venture.
However, AT&T has promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.