A tribunal in The Hague has rejected China's claims to economic rights across large swathes of the South China Sea.
"There was no legal basis for China to claim historic rights to resources within the sea areas falling within the 'nine-dash line'," the court said.
This was a reference to a demarcation line on a 1947 map of the sea, which is rich in energy, mineral and fishing resources.
In the 497-page ruling, judges also found that Chinese law enforcement patrols had risked colliding with Philippine fishing vessels in parts of the sea and caused irreparable damage to coral reefs with construction work.
China, which boycotted the case brought by the Philippines, has said it will not abide by any ruling.
Its state media had already delivered their verdict well before the ruling in The Hague.
"Arbitration Invalid," declared the front page of the China Daily newspaper on Tuesday morning, many hours before the actual result.
"Beijing will not step back, and will not allow what it sees as a wolf-pack scheme to succeed," it had earlier warned.
State news agency Xinhua has been referring to the court as a "law-abusing tribunal".
A cartoon published by the national TV station CCTV shows a sad panda in the dock and a one-eyed judge presiding from above.
NULL, VOID, NO BINDING FORCE. China neither accepts nor recognizes award of #SouthChinaSea arbitration pic.twitter.com/TF0g4BUHQD
— China Xinhua News (@XHNews) July 12, 2016
A pre-emptive PR campaign has been ramping up for weeks insisting that China is in the right and the case is an attack on its sovereignty.
The narrative being pushed strongly is that China is not the aggressor: it is the victim merely trying to defend its national interests against those who seek to undermine and contain it (by which it means the United States).
The US comes into this because, despite not taking a position on the individual territorial disputes (China, Vietnam, The Philippines, Taiwan, Malaysia and Indonesia all lay claim to parts of the sea).
It has, however, been carrying out what it calls 'freedom of navigation patrols' through the waters, effectively rejecting China's claim to territorial waters around its artificial islands.
It is also a treaty ally of the Philippines.
Rising tensions
Admiral Harry Harris, head of the US Pacific Command, has previously warned that China is militarising the South China Sea. "You'd have to believe in a flat earth to think otherwise," he said.
The Philippines government brought this case in 2013 to challenge China's claim to maritime rights around the artificial islands it has created, and the validity of the "nine-dash line" a marking that first appeared on Chinese maps in 1947, drawing a boundary around about 90% of the sea and claiming it for China.
Today's ruling will not determine the issue of sovereignty over these features - who has a legitimate claim - but it is nevertheless the first time any legal challenge has been brought in the South China Sea, and the first test of whether international law will be respected.
The decision is legally-binding but without a body to enforce it the next steps will likely be determined by the respective parties themselves.
There are several measures China could take in the short term if it chooses to up the ante: building on the disputed Scarborough Shoal reef, closer to Manila than its other outposts, attempting to drag the Philippines navy ship 'Sierra Madre' from its position on Second Thomas Shoal, or declaring an Air Defence Identification Zone (ADIZ) over the area.
The PLA Navy has been carrying out live-firing drills in the sea in the run-up to this judgement routine it insists, just a coincidence of timing.
But it may also see an opportunity for dialogue.
The Philippines has a new president, who despite threatening (during his election campaign) to ride a jet-ski out to confront the Chinese positions, has recently indicated he may be open to talks with Beijing.
What is clear is that this ruling is by no means the end of this issue - the rising tensions in the South China Sea are from resolved.
