The music mogul, who snapped up the likes of X Factor stars One Direction, Little Mix and Leona Lewis for his Syco label, has long been the TV judge singing show contestants were desperate to impress.
But according to the Express, in a Secrets of the Hitmakers documentary set to air on Channel Five tonight he tells how missing out on a hugely lucrative deal made him feel sick every time he heard a Kylie song.
Stock Aitken Waterman: Legends of Pop is the first part of the Channel Five series which sees Cowell reminisce on his early days working alongside his old Pop Idol co-star, Pete Waterman.
Cowell says: "I got a phone call from Pete who said, 'Have you heard of this show called Neighbours?' I said, 'Yes.' He said do you know who Kylie Minogue is?' I went, 'No.'
"He said, 'I have a deal with Mushroom Records. They want me to sign a deal with Kylie Minogue. Will you sign her?' I said, 'Yes, if you make the record. He went, 'No.' I said, 'Well, then I'm not signing her.'
"For about five years I felt physically sick every time I heard one of her records, thinking, 'God, if she’d been signed to me my label would have gone insane."
At the time, Cowell had not yet set up the hugely successful label Syco and had been offered Kylie for his venture Fanfare Records, which folded in 1989 leaving him close to bankruptcy.
Waterman also tells the story of creating Kylie's pop stardom himself in the documentary, admitting that his company had completely forgotten the Australian star was coming to visit them and had to cobble something together at the last minute for her to sing.
They made a rushed attempt at writing what became her debut hit I Should Be So Lucky inspired by wondering why she wanted to pivot from acting into singing and wondering if she was looking for love.
Kylie reportedly recorded the song in under an hour and then left again in a taxi.
Stock Aitken Waterman: Legends of Pop airs tonight at 8.30pm on Channel Five.