The action comes five days after the Orioles apologized for an "unintentional breach of protocol" in signing Kim, regarded as the country's top left-handed high school pitcher.
MLB did not approve Kim's deal because the Orioles failed to conduct a proper "status check" of his eligibility status, according to an industry source. According to the Korean Baseball Organization's agreement with MLB, any team wishing to sign a South Korean player must inquire on that player's status through the commissioner's office.
Orioles executive vice president of baseball operations Dan Duquette said Wednesday that he would have no further comment on the situation beyond the team's statement last week.
The Orioles will likely have the opportunity to attempt to sign Kim again at a later date.
Last month, the Orioles signed Kim to an international free-agent deal worth a reported $550,000, a move that has drawn outrage from the South Korean baseball community, which claims the Orioles didn’t follow the proper measures.
Shortly after the Orioles signed Kim, the KBO filed a formal complaint with MLB, contending that the Orioles failed to follow protocol in signing Kim.
Last week, the Korean Baseball Association, the nation’s governing body for baseball, banned Orioles scouts from KBA-sanctioned games, which include the national high school and college tournaments that serve as a treasure trove for scouts seeking the country's top players. The KBA added that the same penalty will be applied to other major league teams that contact amateur players before their senior seasons.
The KBA also suspended Kim from playing and coaching in Korea indefinitely for making contact with a pro team before his final year of high school.
The source said it was unclear whether the Orioles would face additional penalties.
Players outside the United States, Canada and Puerto Rico can be signed by major league clubs as international free agents once they turn 16.
MASNsports.com first reported that MLB would not approve Kim's contract with the Orioles.
Note: Left-handed reliever Clay Rapada cleared waivers and was released by the team. Rapada confirmed the move on his Twitter account.