The controversial measure has been shelved indefinitely by the embattled territory’s chief executive Carrie Lam in response to an angry public backlash.
Many in the former British colony feared it would further erode legal protections and freedoms promised by Beijing when it took control in 1997.
There were also concerned it could be used to target critics of the Chinese regime.
The climbdown on the proposal came ahead of a further major opposition rally on Sunday.
Hundreds of thousands of Hong Kong residents have taken to the streets in earlier demonstrations, with protests turning violent on Wednesday, ramping up pressure on Ms Lam to back down.
Announcing the suspension, she said: “The original urgency to pass the bill in this legislative year, is perhaps, no longer there.
“After a repeated internal deliberation over the last two days, I now announce, that the government has decided to suspend the legislative-amendment exercise.”
Ms Lam added: “I want to stress that the government is adopting an open mind to heed comprehensively different views in society towards the bill.”
Ms Lam, who previously refused to withdraw the bill and has faced demands for her resignation, said she would “adopt a sincere and humble attitude in accepting criticism” over the government’s handling of the issue.
