Starting on Sunday, Hong Kong residents will be able to apply for a new visa scheme which paves the way for British citizenship.
But China says it will no longer recognise the special British passport in question, which has already been in use for years.
The British National Overseas passport, or BNO, is purely a travel and identification document, part of a special status created under UK law in 1987 which specifically targets Hong Kong, a former British colony.
Britain's new visa scheme will allow BNO holders to live, study and work in the country for five years, and eventually apply for British citizenship.
But China hit back at the new program on Friday, saying it would no longer recognize the BNO passport as a valid travel or identification document.
The UK's visa scheme was first announced last year in response to China's new national security law for Hong Kong.
Britain says the law is being used to stifle dissent and breaches the agreement under which the colony was handed back to China in 1997.
Prime Minister Boris Johnson said on Friday he was "immensely proud" of the new scheme, adding that it "honours our history and friendship with the people of Hong Kong" and stands up "for freedom and autonomy."
And Britain's foreign ministry said Friday it was "disappointed but not surprised" by China's swipe at BNO holders.
China says the UK's offer of a pathway to citizenship is a violation of international law and interferes with its internal affairs.
However, its move to reject BNO passports is largely symbolic.
Hong Kong residents normally don't use their BNO passports to travel to mainland China.
But it may signal tougher actions from China.
The UK's new visa scheme opens the door for an estimated 2.9 million BNO holders, and a further 2.3 million eligible dependents, to go to Britain.