HONG KONG—President Rodrigo Duterte’s government will announce later Wednesday a decision to block Macau casino operator Galaxy Entertainment Group Ltd. from building a $500 million integrated casino development on the Philippine resort island of Boracay amid an environmental crisis, according to a person familiar with the matter.

In March, the Philippine Amusement and Gaming Corp., or Pagcor, which regulates the casino industry, granted a provisional license to Galaxy to open a casino and resort in Boracay, a popular destination...