A new correlation between ultrasonic shear wave velocity and Poisson's ratio has been established for isotropic porous material based on physical acoustic theory. Poisson's ratio may decrease, increase or remain unchanged with decrease in shear wave velocity depending on pore-shape and Poisson's ratio of the bulk solid. In case of decreasing Poisson's ratio with decreasing shear wave velocity, it passes through a minimum and then increases again to reach a limiting value of 0.5. It has been further demonstrated that the Poisson's ratio versus porosity relation deduced from the proposed correlation agrees with the experimental data extremely well.