The containers, which held 115 tonnes of water, failed quality testing by Shanghai's entry-exit Inspection and Quarantine Bureau in February, the company said.
The water was denied entry over concerns that the amount of microbial flora present in the products exceeded China's maximum allowance, the company said in a press release.
Microbial flora is bacteria present within bottled water as part of its natural formulation.
The announcement highlights the discrepancy in food safety standards and regulations between China and its major trade partners like the US and EU.
A number of manufacturers have fallen foul of tightened safety testing, particularly in China, which is undergoing intense scrutiny following some well publicised health scares involving its food and beverage products.
Despite this concern, Danone has played down fears that the detained water may have posed a health danger to consumers.
Danone said that the detained products still complied with both the World Health Organisation's (WHO) standards and European Union requirements on microbial levels in bottled water.
Nonetheless, the company stressed that the confiscated shipment remained an isolated incident, and that it would continue to ensure its products were suitable for consumption in the country. "
We respect and will adhere to local regulation but we need to reassure consumers that the microbial flora, naturally present in natural water, are totally safe for health," the company stated.
The company added that the containers, which currently remain in a Chinese warehouse, will now be shipped back to France.