But the plan sparked mixed feedback and concerns that it could contribute to the historic structure being damaged.
The competition offered the exclusive chance to sleep in one of the ruined watch towers on the Unesco-listed Great Wall near Beijing, with a proper bed but neither windows nor roof.
The contest, which would also have served up a multi-course gourmet dinner and traditional Chinese music to winners, was created to shine a spotlight on tourism in the country - but it backfired.
U.S. home-sharing platform Airbnb has suspended a plan to provide lodging on the Badaling Great Wall in Beijing amid concerns that it could damage the ancient structure.
But when the offer first appeared on the Airbnb website, Chinese social media was quick to pick it up.
The competition also prompted upset from some Chinese netizens, who said that the structure was a historical relic that should not be used for commercial lodging purposes.
The commission said it did not support the project as it is "not in line with the Great Wall's heritage conservation values", according to a statement, the South China Morning Post reports.
"We were excited to promote the Great Wall and Chinese cultural heritage with our Night At The Great Wall and while there was an agreement in place that was the basis for the announcement of this event, we deeply respect the feedback we have received", the statement said.
"We remain committed to that goal and in the weeks and months ahead, we will be working closely with our hosts and guests in China as well as community leaders to highlight the culture and history that make China one of the most dynamic destinations in the world".
People who had entered the competition would be contacted about other ways they could "explore and discover incredible experiences in China", it said.
"We welcome everyone to supervise the protection of the Great Wall".
The company has held similar activities in a number of countries, including on a reef in the Great Barrier Reef in Australia, and the Dracula Castle in Romania.