The move is seen as a setback for BH Airport, the concessionaire of Tancredo Neves international airport which is about 30km from Pampulha.
The government measure is generating huge controversy in Brazil.
The veto creates an impasse as the money to be raised from the privatization was destined to help tackle the Brazilian state government's fiscal shortfall.
In July, Canada's Alberta agreed to inject 400mn reais into the water and sanitation company.
The country's weak economic performance impacts cargo volume.
The government seeks additional support from lawmakers for the controversial issue.
The five projects entail finishing works left behind by the road's previous concessionaire while a new PPP for the entire road is expected to be tendered next year.