The Federal Communications Commission (FCC) said it had voted unanimously to revoke authorisation for the company’s American unit to operate in the US.
The firm must stop providing telecoms services in America within 60 days.
The announcement comes after larger rival China Telecom had its licence to operate in the US revoked in October.
FCC chairwoman Jessica Rosenworcel said: “There has been mounting evidence – and with it, a growing concern – that Chinese state-owned carriers pose a real threat to the security of our telecommunications networks.”
China Unicom told the BBC its American unit “has a good record of complying with relevant US laws and regulations and providing telecommunication services and solutions as a reliable partner of its customers in the past two decades”.
The Chinese Embassy in Washington did not immediately respond to a request for comment from the BBC.
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Chinese technology and telecoms firms have been targeted in recent years by US authorities over national security concerns.
In November, President Joe Biden signed legislation that stops companies judged to be a security threat from receiving new telecoms equipment licences.
Under the Secure Equipment Act, the FCC should no longer review applications from companies ruled to be a threat.
It means equipment from Huawei, ZTE and three other Chinese companies cannot be used in US telecoms networks.
Washington said that some of the firms are helping develop the Chinese military’s quantum computing programme.
In October, Washington revoked the US licence of China Telecom, also citing national security concerns.
US officials said the Chinese government’s control of the company gave it the opportunity “to access, store, disrupt, and/or misroute US communications”.
This in turn could allow it “to engage in espionage and other harmful activities against the US”, they said.
In 2019, Chinese state-owned telecoms giant China Mobile also had its US licence revoked.