Under the national AusVetPlan any horse which has been confirmed with positive test results to Hendra must be destroyed.
The horse's Gold Coast co-owner and breeder Warren Small told ABC news that the horse, Tamworth, is worth at least $200,000 and has been cleared of the virus.
"I'm sick and tired of dealing with Government departments. I've dealt with them for years in various capacities and they are never accountable for their actions," Small said on ANC radio. "They couldn't care less about some individual group of individuals that are just battlers trying to breed and race racehorses."
Tamworth contracted Hendra at the Redlands Veterinary Clinic in early July. Four other horses at the clinic died, and another two on another property also died from Hendra.
A veterinarian and a vet nurse from the clinic are still in hospital after becoming infected with Hendra.
Small said he was told by the Department of Primary Industries that Tamworth had only antibodies in his system, "but they're saying there's a 10 per cent chance that it could be hidden in his system and come out at a later date and the only evidence that they have of that is a different virus that was found in India," Small told ABC.
"We're just told that if you don't sign the documents we're going to do it anyway and if you don't agree to it and fight on with it then well we're told under the legislation there is a $60,000 fine and or one year in jail," Small said in a radio interview.
"I want to get this straight... if the horse is positive of a virus that people can contact and get ill and die from it, then we're in agreeance with them. But we are told the horse is free of the virus and has only got the antibodies in his system. They're looking at the easy way out by 'let's just kill off the problem and we won't have it again'," he said.
Queensland's Chief Vet Ron Glanville said a destruction order had been issued. "The national policy in relation to these horses is that they need to be put down to protect the future health of both people and horses," he said.