All Bermudans will be allowed to form domestic partnerships, which its government says will offer equal rights.
After legalising same-sex marriage last year, Bermuda's governor signed a bill into law on Wednesday revoking the change.
A Supreme Court ruling gave gay couples in the wealthy, British overseas territory the right to marry back in May 2017.
It is the first time any country has gone back on on the decision.
Same-sex couples who married before the bill was revoked will not have their marital status annulled.
All of Bermuda's 60,000-strong population will be allowed to form domestic partnerships under the Domestic Partnership Act 2017, which its government says will offer equal rights.
Governor John Rankin said he wanted to balance opposition to same-sex marriage on the island, while still complying with European court rulings that ensure legal protections for same-sex couples.
When the marriage equality ruling was initially passed in 2017 it sparked outrage among conservative islanders and saw and thousands protest outside parliament.
Its critics are calling the repeal a striking rollback of civil rights.
LGBT activists said the domestic partnership amounted to a second-class status for same-sex couples.
International human rights groups said the new legislation contradicts part of Bermuda’s constitution that guarantees freedom from discrimination.
They lobbied Rankin and British Foreign Secretary Boris Johnson to deviate from standard practice in self-governing UK territories and withhold assent.
Openly-gay UK Labour lawmaker Chris Bryant called the bill a “deeply unpleasant and very cynical piece of legislation,” during a January debate in the House of Commons.
More than a dozen countries in Europe have now legalised gay marriage, with Austria, Malta and Germany becoming the latest to pass laws on the subject.