To "wave off" (also written wave-off) is to signal an
aircraft approaching for a landing that the landing attempt should be aborted. This usually implies that the aircraft should
go around. The term seems specific to aircraft operations, and can apply either to the action as a verb ("the
LSO waved off the aircraft") or to the event as a noun ("the first landing attempt resulted in a wave off").
Although I believe this was originally specific to aircraft carrier operations, it has become more generalized. NASA refers to Space Shuttle landings which are rescheduled, for whatever reason, as 'wave offs' (see the entry for 5:02 here). The original signal to abort a landing on an aircraft carrier did, in fact, involve 'waving' signal paddles.
The term has spread out farther, of course. GhettoAardvark points out that people can wave off buses, for example. I believe that the carrier use is the first use, but can't prove it. If anyone has evidence either to support or contradict this position, I'd love to hear it.
Iron Noder 2010