Ms Huxley was aged 18 in November 2005 when 39-year-old Robert Black Farmer entered her home in Northmead, in western Sydney.
He bound and beat her, then doused her in petrol, leaving Ms Huxley lying in a pool of blood and fuel as he set the property alight.
The teenager barely survived and was left with horrific injuries, including permanent brain damage.
Farmer was sentenced to more than 24 years in prison in 2008, and on Thursday his bid for an early release was shut down.
"It's just such a relief," Ms Huxley's mother Christine told reporters.
"I'm hoping that we can have a champagne and a toast.
"The build up has just taken a toll on us all but I think we can breathe again."
Ms Huxley's gruesome bashing and her public advocacy in the aftermath have captured international attention.
She met Pope Benedict XVI in 2008, during a ceremony in Sydney's inner city suburb of Darlinghurst, just metres away from the court where the offender was sentenced.
Ms Huxley had expressed grave concerns about her attacker's possible release prior to the parole authority's decision in an interview with Nine's A Current Affair.
"It scares me for sure," she said earlier in May.
"Because you don't know ... what is he capable of doing next?"
The NSW State Parole Authority cited Farmer's ongoing denial and community protection concerns as reasons behind its decision to refuse him parole.
It took into consideration the expert advice of the Serious Offenders Review Council.
"We are not satisfied that his release to parole is sufficient for his reintegration and the protection of the public,'' the report said.
The council recommended he complete one-on-one risk mitigation sessions with a psychologist given the horrific nature of his violent offence and his ongoing denial.
The protection of the community, including the safety and wellbeing of victims and their families, is a priority in all decisions, the authority noted.
Farmer, whose total sentence expires in January 2031, will not be reconsidered for release until 2027 but has the right to apply for a review of the authority's decision.
The parole authority said Farmer completed two offender programs but has not participated in the Violent Offenders Therapeutic Program.
"You'd like to think that people can eventually be reformed by doing those programs in jail," Ms Huxley's sister Simone said.
"But it's up to them to decide whether he'll be released.
"We're so grateful that Lauren's still with us, she is amazing, she's a miracle."
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