Foreign Secretary Dominic Raab tells parliament the treaty would be suspended immediately and an arms embargo would be extended to former British territory.
Britain's government has suspended its extradition treaty with Hong Kong and also blocked arms sales to the former British territory, after China imposed a tough new national security law.
Foreign Secretary Dominic Raab confirmed the widely expected move in parliament on Monday, despite Chinese warnings that Britain was making a grave foreign policy error and risked reprisals.
He also announced an extension to Hong Kong of an arms embargo of "potentially lethal weapons" already in force against mainland China for the last three decades.
"We will protect our vital interests,'' Raab said. "We will stand up for our values and we will hold China to its international obligations."
UK followed the example of the United States, Australia and Canada by suspending extradition arrangements with the territory.
The arms embargo extends a measure in place for China since 1989.
It means that Britain will allow no exports of potentially lethal weapons, their components or ammunition as well as equipment that might be used for internal repression such as shackles, firearms and smoke grenades.
READ MORE: China's security law in Hong Kong explained
China's abuses against Uighurs
Raab also accused Beijing of “gross and egregious” human rights abuses over its "deeply troubling" treatment of ethnic and religious minorities in Xinjiang Uighur Autonomous Region.
Rights groups and experts estimate that more than one million ethnic Uighurs and other Turkic-speaking minorities have been rounded up into a network of internment camps.
Raab said the reports of forced sterilisations and mass detentions in the predominantly Muslim region required international attention.
"It is clear that there are gross, egregious human rights abuses going on...it is deeply, deeply troubling," he told the BBC.
"The reports and the human aspects of it... are reminiscent of something we have not seen for a long, long time, and this is from a leading member of the international community that wants to be taken seriously.
"We want a positive relationship (with China), but we cannot see behaviour like that and not call it out," Raab added.
Faltering relations with China
Such a move would be another nail in the coffin of what former Prime Minister David Cameron has cast as a "golden era" of ties with the world's second-largest economy.
But London has been dismayed by a crackdown in Hong Kong and the perception that China did not tell the whole truth over the novel coronavirus outbreak.
Last week Prime Minister Boris Johnson ordered Huawei Technologies equipment to be purged completely from Britain's 5G network by the end of 2027.
China has accused Britain of pandering to the United States.
Earlier on Sunday, China's ambassador to Britain warned of a tough response if London attempted to sanction any of its officials, as some lawmakers in Johnson's Conservative Party have demanded.
"If UK government goes that far to impose sanctions on any individual in China, China will certainly make a resolute response to it," Liu Xiaoming told the BBC's Andrew Marr Show.
"You've seen what happens in the United States - they sanction Chinese officials, we sanction their senators, their officials. I do not want to see this tit-for-tat happen in... China-UK relations."
Raab told the same programme he would not be drawn on future additions to Britain's sanctions list but he denied that Britain would be too weak to challenge China through this channel.