The legislature's powerful Standing Committee ruled all candidates for chief executive must receive more than half of the votes from a special nominating body before going before voters.
Hong Kong democracy activists have held massive protests calling for genuine democracy in the Chinese territory, over concerns candidates would continue to be screened to assess their loyalty to Beijing.
Activists have also decried the nominating committee held up by Beijing as beholden to Chinese leaders and were mobilising to stage massive protests against the decision.
Li Fei, deputy secretary general of the National People's Congress' Standing Committee, said openly nominating candidates would create a "chaotic society".
He said: "These rights come from laws, they don't come from the sky."