The move will affect six theaters operated by Warner Bros International Cinemas - including a planned cinema complex in downtown Shanghai that was supposed to become the city's version of Hollywood's Walk of Fame.
New regulations issued by the central government late last year required that "Chinese mainland investors must own at least 51 percent or play a leading role in their joint ventures with foreign investors".
The rules were a drastic change from a 2003 regulation that opened seven cities, to majority overseas investment up to 75 percent of a cinema on a trial basis.
Company officials refused to disclose how much WBIC has already invested in its cinema business in the mainland.
Total box office revenue from the company's mainland theaters was 120 million yuan (US$15 million) last year, compared with a total market of two billion yuan.