World Health Assembly (WHA) President Ahmed Robleh Abdilleh, also Djibouti's health minister, said in a statement that a proposal sent by 13 WHO members to allow Taiwan to join as an observer would not be included in its official agenda.
Taiwan's foreign ministry expressed "deep regret and dissatisfaction" at the decision.
"China's repeated use of politics to override the public interest of global health security and harm the health and human rights of the Taiwanese people is unacceptable to the Ministry of Foreign Affairs," it said in a statement.
Taiwan is excluded from most global groups due to China's objections.
China insists that Taiwan should not be treated as an independent country as it considers the island a province.
Taiwan argues that its exclusion from the WHO has hampered efforts to fight the COVID-19 pandemic.
It is allowed to attend some technical WHO meetings.
On Tuesday, Taiwan said it disputed China's claim that it had made proper arrangements for Taiwanese participation in global health affairs.
Assembly president Abdilleh said the decision to reject Taiwan's inclusion followed a recommendation from the General Committee which discussed the proposal on Sunday in a closed-door meeting.
"The political and legal foundation for Taiwan's participation in WHA ceases to exist," Chen Xu, China's ambassador to the United Nations in Geneva told the assembly shortly before the decision.
"This political manipulation will only be met with opposition from all parties."
However, both the United States and the United Kingdom showed their support for Taiwan's inclusion.
Loyce Pace, US envoy to the assembly, said that Taiwan has been a critical partner contributing constructively to global health and that the United States "deeply regrets" its exclusion from attending the assembly as an observer.
"There's clearly no health crisis to justify not including Taiwan as an observer of the WHO," UK health minister Sajid Javid told the assembly.
This year's assembly, joined by thousands of delegates including nearly 100 from China, will discuss key reforms such as changes to the WHO's funding.
China began blocking Taiwan's WHA participation from 2017, marking the end of a warmer period of relations between officials in Beijing and Taipei.
