UN warned of a serious threat to the delicate ecosystem of the world's largest mangrove forest.
The UN's culture and science agency UNESCO said there was a high chance pollution from the plant would "irreversibly damage" the Sundarbans, which straddles the border of India and Bangladesh and is home to endangered Bengal tigers and rare dolphins.
It also provides a defence against storm surges and cyclones that have killed thousands of people in impoverished coastal villages and islands in recent years, and was declared a UNESCO World Heritage Site in 1997.
The planned 1,320 megawatt Rampal plant, a joint project by India and Bangladesh, would be powered each year by nearly five million tons of coal transported by boat along the ecosystem's fragile waterways.
Scheduled to open in 2018, the plant would also discharge nearly 125,000 cubic metres a day of chemically-tainted water used to cool generators, according to design specifications.
In a report published late Tuesday, UNESCO said the plant's construction would result in a substantial increase in shipping and dredging in the area.
It recommended that the plant be relocated "to a more suitable location, where it would not impact negatively on the Sundarbans".
There was no immediate comment from Bangladesh authorities or from the joint-venture company behind the $1.7-billion power plant.
Bangladeshi Prime Minister Sheikh Hasina has defended the project and rejected concerns about it as politically motivated.
But it has sparked protests in Bangladesh, where hundreds of campaigners marched from Dhaka to the Sundarbans earlier this year to demand the project be cancelled.
The site is just 14 kilometres (nine miles) north of the Sundarbans.
On Tuesday dozens of people were injured when police fired tear gas at hundreds of campaigners who were marching to the Indian embassy in Dhaka with a letter asking the Indian prime minister to scrap the project.
"UNESCO has done a responsible job," said Anu Mohammad, a university professor who has been leading the campaign against the power plant.
"The government should heed their call and scrap the project. The sooner it is scrapped, the better for the Sundarbans."