Scottish & Southern Energy (SSE) initially proposed building a wind farm at the site seven years ago, but since then has faced opposition from wildlife charity the Royal Society for the Protection of Birds (RSPB) Scotland, which claimed the site was of importance to hen harriers, birds of prey that are threatened with extinction in some parts of the UK.
SSE said it had developed its plans for the site prior to it being given SPA status.
SSE director of onshore renewables David Gardner said: "This site had the wind resource and the site dynamics to be a very good project, but having listened to the concerns of the key consultees we have concluded that the reasonable action to take is to focus our resources on onshore wind farms elsewhere. We are grateful to all those who took part in the project consultations."
RSPB Scotland head of planning and development Aedán Smith said: "It is very encouraging that they give part of their reason for their withdrawal as being due to the environmental importance of the site. This area was proposed for SPA designation before SSE submitted their application and we have always maintained this is an unsuitable place for a wind farm."
He added: "The vast majority of windfarms pose no significant threat to wild bird populations. This is reflected by the fact that the RSPB only ends up maintaining objections to less than 10 per cent of the windfarms we get involved with across the UK."