An international tribunal has found that there is no legal basis for China's "nine-dash line" claiming rights to much of the South China Sea.
The tribunal issued its ruling in The Hague in response to an arbitration case brought by the Philippines against China.
The panel said that any historic rights to resources that China may have had were wiped out if they are incompatible with exclusive economic zones established under a UN treaty.
The Philippine government welcomed the ruling by the Permanent Court of Arbitration.
The country's foreign secretary Perfecto Yasay said the "milestone decision" was an important contribution to efforts in addressing disputes in the sea.
He said: "The Philippines reiterates its abiding commitment to efforts of pursuing the peaceful resolution and management of disputes with the view of promoting and enhancing peace and stability in the region."