The committee, comprised of seven NBA owners, held their meeting via teleconference on Monday.
The NBA Board of Governors, consisting of all 30 team owners, will meet the week of May 13 to issue a final vote on whether the team should be moved.
The Maloof family has had an agreement since January to sell a 65 percent controlling interest in the Kings to a Seattle group led by hedge-fund manager Chris Hansen and Microsoft Chairman Steve Ballmer. Sacramento Mayor Kevin Johnson has helped put together a competing counteroffer complete with a new arena plan and an ownership group headed by software tycoon Vivek Ranadive.
The NBA helped broker a deal with the Maloofs and Sacramento to build a new arena in February 2012 after the team had filed to relocate to Anaheim, Calif. the previous year. The Maloofs backed out of the deal not long after to the disappointment of league officials and the anger of the Sacramento community.
A simply majority vote of the Board of Governors is required to approve the relocation of an NBA team, but a three-quarters vote is needed to approve a change in ownership, making the 7 "no" votes from the relocation committee members enough to scuttle a sale to Hansen.
The vote against relocation also leaves plans for a new basketball arena in Seattle in limbo. The city had indicated that certain permits and work already done for the proposed new arena would be viable for five years.
Hansen's architecture firm had planned to file a Master Use Permit with the city Tuesday afternoon. It is unknown if Hansen's group, WSA Properties, will continue with the arena work. His representatives did not immediately return a call seeking comment.
It's unclear what the next step is for the Maloof family, which is not bound to sell the team to the Sacramento group Johnson has put together. In a letter sent to the relocation and finance committees, the Maloofs said they preferred to sell to the Seattle group and expressed discontent with Sacramento's latest bid.
"I've never been prouder of this city," Johnson tweeted. "I thank the ownership group, city leaders, but most of all the BEST FANS IN THE NBA!!!
The mayor also commended Seattle for its effort and wrote that the Pacific Northwest city "no doubt deserves a team in the future."
Those hoping to welcome the Sonics home were filled with pain, hurt and shock on Monday.
"I think we all had hopes that we were going to be watching basketball at KeyArena next year," said filmmaker Jason Reid.
Reid, whose film "Sonicsgate" gained nationwide attention, is as passionate a fan as there is.
"I find it hard to believe that they would all vote unanimously against our team, our ownership, our city," he said.
In a Monday night statement, Hansen said that while his team of investors is disappointed in the committee's decision, they're still "fully committed to seeing the transaction through" and do not plan on giving up.
"As you are all well aware, we have a binding transaction to purchase the Kings for what would be a record price for an NBA franchise, have one of the best ownership groups ever assembled to purchase a professional sports team in the US, have clearly demonstrated that we have a much more solid Arena plan, have offered a much higher price than the yet to be finalized Sacramento Group, and have placed all of the funds to close the transaction into escrow," the statement reads.
Hansen said his team plans on stating its case for relocation at the upcoming Board of Governor's meeting.