The mayor overruled a decision to grant planning permission for the project after concerns were raised about the quality of the design and the damage to the city’s skyline.
“I consider that the proposal would not constitute the high standard of design required for a tall building in this location,” Mr Khan said in a letter explaining his decision.
“The proposal would compromise the ability to appreciate the outstanding universal value of the Tower of London World Heritage Site and would cause harm to the historic environment, the wider skyline and image of London, strategic views as well as the public space surrounding the site.
“The public benefits of the scheme are limited and would not outweigh this harm.”
The Tulip, designed by Norman Foster’s architecture firm for billionaire Joseph Safra, would have stood next to The Gherkin building in the capital’s financial district.
Its backers claimed the tower – a tall shaft topped with a viewing platform, rotating gondolas, a restaurant, bar and educational facilities - would attract 1.2m visitors a year once completed in 2025.
At 305 metres tall, it would be the second highest skyscraper in western Europe, just 17 feet shorter than The Shard.
Kieran Wardle, a London-based architect, said: "The Tulip is the latest in a string of bizarre proposals for London’s skyline.
"Planners in the City of London have generally done a great job of balancing the skyline with the City’s thirst for growth, but may have gone too far with the Tulip. Not many architects will argue with the Mayor’s decision."
While some polls found public approval for the project, the mayor also received dozens of objections to the appearance of the tower – with one stating that the “design is more appropriate for a theme park rather than central London”.
If the developers appeal against the mayor’s refusal, the final decision could be made by either a planning inspector or the secretary of state.
“The Tulip Project team are disappointed by the Mayor of London’s decision to direct refusal of planning permission, particularly as the Tulip will generate immediate and longer-term socio-economic benefits to London and the UK as a whole,” a spokeswoman said.