Simon and Schuster's Adam Rothberg said a letter had been sent to the state-owned Yilin Press last week, "after they were unable to satisfy our earlier demands in terms of publishing a complete, full and accurate translation of the book".
The move followed three months of negotiations over Yilin's first translation effort of "Living History", which had infuriated Clinton by excising numerous passages critical of China.
The book has become an immediate best-seller in China, but Simon and Schuster, acting for the US senator and former first lady, demanded a new uncensored version be issued.
While Yilin Press agreed to restore some of Clinton's comments on China, it still refused to include some of the more critical passages, leading to the US publisher deciding to withdraw the rights entirely.
Rothberg said the company was not looking for another Chinese publisher.
Given the level of state control over the sector in China, it is highly unlikely that any other publisher would be willing to go where Yilin Press has opted not to tread.
At the time the controversy over the translation first broke, Yilin Press said it was making "technical adjustments" to the text because it wanted to rush copies out quickly to prevent pirated Taiwanese editions flooding the market.
China has been condemned for
cracking down on press freedom
Simon and Schuster responded in September by making the English and Chinese versions of the censored passages available on its website.
Freedom of expression
China is notorious for its draconian restrictions on freedom of expression.
A Human Rights Watch report last year condemned the country for obstructing the free flow of information.
It reported the Chinese authorities blocked major internet search engines, closed publications, harassed foreign and domestic journalists, and hampered the work of academics and activists.
Meanwhile, restrictions on domestic print media escalated.
Several Party circulars ordered official newspapers to use caution when reporting on "sensitive issues", and not to publish reports downloaded from the internet.