The renewable energy firm had proposed the STG1.5 billion ($A2.9 billion) facility at a site in Ardersier near Inverness, saying it could create up to 1500 jobs.
A spokesperson said the government could not support the use of the firm's turbines in UK offshore wind projects.
"We will always act to protect our national security, and we are committed to strengthening and prioritising resilient and sustainable offshore wind supply chains.
"We welcome investment from China where it's in our national interest - as demonstrated by significant inward investment during the prime minister's recent visit to Beijing.
"We will continue to take a consistent, long-term and strategic approach to our relationship with China, co-operating where we can, whilst protecting our security and resilience."
The decision came after a lengthy deliberation process, with Trade Minister Chris Bryant saying in January the UK had to be "clear eyed" in its relationship with China.
Posting on social media, First Minister John Swinney said he was "deeply disappointed" by the decision, adding the UK government had put 1500 Scottish jobs at risk.
"At the very moment we should be building clean energy, they are sabotaging Scotland's industrial future."
Swinney had previously described the decision as a "pivotal" one in the development of Scotland's renewable energy potential.
Deputy First Minister Kate Forbes said: "National security is obviously important and must be respected, but it is regrettable the UK government has failed to explain precisely what the problem is with Ming Yang."
A Ming Yang spokesperson said: "We are disappointed by the UK government's decision not to allow Ming Yang's world-leading technology to be used.
"The decision misses a significant opportunity to increase competition in the capacity-constrained wind turbine market, delays Ming Yang's plans to invest STG1.5 billion in Scotland in offshore wind turbine production - creating up to 1500 jobs - and risks energy prices staying higher for longer for British households and industry at a time of global energy shocks.
The company said it would continue to engage constructively with the UK government, including "on the important topic of national security."
10°C