People arriving in the UK from the popular Spanish Islands from 4 a.m. on Saturday are required to self-isolate.
The decision is a major one for the UK travel industry, which has been hit hard by the coronavirus pandemic.
Many companies saw an increase in bookings for the Canary Islands when they were added to the list of travel lanes in October.
Mr Shapps said their withdrawal was due to an increase in weekly cases and positive tests for the virus.
The positivity of the tests reached 7.1% across the Canaries and 8.8% in Tenerife in particular, according to the Ministry of Transport.
Travelers to mainland Spain must already self-isolate upon their return to the UK.
Paul Charles, Managing Director of travel consultancy The PC Agency, said: “This is completely devastating news for the thousands of UK travelers who have booked to go to the Canaries for Christmas and New Years.
“It is also a blow to travel agencies who had seen an increase in bookings for the winter after the Canaries were added to the list of travel lanes.
“This now means thousands of refunds and lost bookings for an industry that needed the Canaries to help them recover. ”
Botswana and Saudi Arabia have been added to the list of travel lanes.
Most people returning to the UK from destinations not on the list must self-isolate for 14 days.
This quarantine period may be shortened for people arriving in England from December 15 if they pay to take a coronavirus test at least five days after landing and test negative.
England has also introduced a quarantine exemption for certain categories of travelers, including people on high-value business trips, sports stars and professionals in the performing arts.
EasyJet chief executive Johan Lundgren said removing the Canary Islands from the list of travel lanes “will be disappointing for many customers”.
But he expressed hope that the new test and release policy “will help some customers stick to their travel plans and take that much-needed vacation.”