China says it will allow Hong Kong to directly elect its leader by 2017 and all of its lawmakers by 2020. Hong Kong's pro-democracy parties have been pushing for universal suffrage in 2012.
British Foreign Secretary David Miliband issued a statement in which he called the delay beyond 2012 a "disappointment."
The Standing Committee of the National People's Congress (China's parliament) released its decision Saturday, after Hong Kong chief executive Donald Tsang submitted a report on reform.
Under the current system, only half of Hong Kong's 60-seat legislature is elected, and the territory's chief executive is chosen by an 800-strong committee full of Beijing loyalists.
Universal suffrage was guaranteed in the Basic Law that was established when Britain handed the territory back to China in 1997, but no timetable was set.
Some information for this report was provided by AFP, AP and Reuters.