The developers, First Flight Wind, decided to cease the plans, after deciding the project could not be built in the timeframes likely to be required under the new market rules.
The firm said: "First Flight Wind believes this to be a disappointing outcome for all involved. A project like this could make a substantial contribution to Northern Ireland's requirements for secure and low-carbon electricity and could provide significant local economic opportunities."
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South Down MP Margaret Ritchie said she was disappointed with the decision.
She said: "Having discussed the current situation with First Flight Wind I will now be seeking meetings with the Utility Regulator and the DETI Minister. It is vital that we pursue all opportunities for job creation and investment, particularly those that complement and can work alongside our traditional industries."
(CD/JP)
