A Pentagon spokesman said in a statement that "China's behavior is inconsistent with the principles and purposes of the RIMPAC exercise", and it has "disinvited the PLA Navy from the 2018 Rim of the Pacific (RIMPAC) Exercise". It takes place in waters around the Hawaiian Islands and Southern California.
The White House said this month it had raised concerns with China about its latest militarisation after CNBC reported anti-ship cruise missiles and surface-to-air missile systems had been installed on Subi, Mischief and Fiery Cross.
The statement also did not mention China's use of a laser against USA pilots flying near Beijing's first overseas military base in the east African state of Djibouti. More than 1,000 military personnel from 27 countries will take part.
"We believe these recent deployments and the continued militarization of these features is a violation of the promise that (Chinese) President Xi (Jinping) made to the United States and the World not to militarize the Spratly Islands".
RIMPAC is the world's largest Naval exercise, held every two years and involving almost two dozen nations, over 50 ships and submarines and hundreds of aircraft. The move is said to be in response to Beijing's recent escalation of the militarization of islands in the South China Sea, which has been well-documented by global reports.
The United States has revoked China's invitation to participate in this year's Rim of the Pacific (RIMPAC) naval exercise, the largest naval drill in the world.
China has participated in the naval drills since 2014.
China has made it clear the Paracel Islands are part of its sovereign territory and that the South China Sea, within its unilaterally designated nine-dash line, is under its control.
The People's Liberation Army Navy's (PLAN) participation in the RIMPAC since 2014 has been a contentious issue as critics of Beijing have argued that Washington should not accommodate a rival power that consistently commits aggression and is actively undermining the US position in the Pacific region.
An invitation to the exercise, scheduled to start in June, carries political clout, and the disinvitation is likely to heighten U.S.
China claims virtually the entire South China Sea, despite overlapping claims by Brunei, Malaysia, Taiwan, the Philippines and Vietnam.
"We have canceled the invitation for the naval forces of China in the exercise of the Asia-Pacific region in 2018".
He said China is simply taking measures in self-defense, which have "nothing to do with militarization".
By excluding China from the event in 2018, the United States was sending a clear message that Beijing was stepping outside global norms, Schuster said.
The US's move comes just days after the People's Liberation Army (PLA) Air Force disclosed that its highly advanced H-6K strategic bomber landed for the first time on an island reef in the South China Sea, which the US Defence Department immediately denounced.
Ding Duo, a researcher at the Chinese government-backed National Institute for South China Sea Studies, said Beijing needs a military presence in the Spratlys to protect its civilian infrastructure.
The South China Sea has heavily traveled shipping lanes, rich fishing grounds and potential oil, gas and other undersea mineral deposits.