Nasdaq-listed FreeSeas reveals in an SEC filing the yard ended the deal after the owner defaulted on a $3.66m sum which came due in April.
FreeSeas had been struggling to meet the final expense on the 33,000-dwt brace at Jiangsu Yangzijiang after ABM Amro ripped up a loan backing the $49.88m order.
It penned the ships in August 2010 and they were due to hit the water in May.
It is understood FreeSeas and the yard remain in dialogue and there is still a chance the owner could take the vessels in if the cash can be secured.
News of the cancellation emerged as FreeSeas revealed it has secured a waiver on a $36.45m loan with Credit Suisse.
It has been granted a two-year payment holiday on the facility, but will pay a fee of $1.125m for the reprieve.
The loan covers three FreeSeas vessels, including the 22,000-dwt Free Goddess (built 1995) which is under the control of Somali pirates after being hijacked late last year.
FreeSeas is also in discussion with Deutsche Bank and First Business Bank to score waivers on its other loans.
An agreement on the $29m DB facility is thought to be in the documentation phase, while talks on the $23m FBB loan are less advanced.
