Damian had won a court battle to ensure they would receive money held in trust funds, but Bing's father, Dr. Peter Bing, has since successfully appealed the decision.
"When Stephen took his own life, he died thinking his children were going to be taken care of," said the 56-year-old Austin Powers star.
"What Stephen wanted has now been callously reversed. I know Stephen would have been devastated."
In the wake of the latest legal decision, neither Damian nor his half-sister Kira — whose mother is tennis player Lisa Bonder — will receive any money on account of them both being born out of wedlock.
Their grandfather's fortune will instead be shared between the two children of Bing's sister Mary, who were born within a marriage.
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Bing had initially refused to acknowledge both Damian, 19, and Kira, 23, but reconnected with both of them later in his life.
Hurley said Bing "fought very hard" in his final year to ensure that his children were recognized.
She added: "I am just relieved that Stephen will never know that Damian’s relatives — Stephen’s father and the family of his sister Mary — were ultimately successful in their appeal against the original trial verdict."
The Mail's report estimates that Damian's share of the trust fund could've been worth as much as $250 million.
Hurley paid tribute to Bing following his death and said she was "very grateful" that they had been on good terms before he passed away.
Marking the anniversary of his father's death last month, Damian — now an actor and model — wrote on Instagram that he didn't realize when he first received the "devastating" news how much it would affect him.
He said: "We all like to show ‘perfect’ versions of our lives. For me, the idea of publicly discussing something as personal as grief is terrifying... but sometimes it’s necessary.
"The last year has been bloody hard — for everyone on the planet — and I think acknowledging that is vital. It’s not weak to struggle. In fact, to get through to the other side is immensely strong."
Bing inherited an estimated $600 million from his real estate developer grandfather in his 20s and went on to pursue a career in Hollywood by founding production company Shangri-La Entertainment, which found success with The Polar Express.
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