The artwork was a giant digital countdown to 2047, the year an agreement guaranteeing Hong Kong's semi-autonomous status, made when Britain handed the city back to China in 1997, will come to an end.
"We regret to announce that the work... Would no longer be part of the exhibition," the Hong Kong Arts Development Council said in a statement, adding that the display "demonstrated disrespect".
The artwork had run down the sides of the 484-metre tall International Commerce Centre, which occupies a prime harbourfront location, each night for around a minute since it opened Tuesday.
Zhang stayed at a waterfront hotel diagonally opposite the ICC tower, on the other side of the city's famous Victoria Harbour.
The artwork was "jeopardising our profession and puts at risk any future possibility to work in the public space", according to the arts council statement, which was published late Sunday.
The 50-year agreement between Britain and China means Hong Kong enjoys freedoms unseen on the mainland.
But perceived interference from Beijing has led to growing concerns the city's way of life is already disappearing.
The year 2047 has become a key date for frustrated pro-democracy groups, who are calling for residents to have a say on what happens when the 50-year agreement lapses.
Many young campaigners are calling for greater autonomy, self-determination, or even outright independence. China has dismissed that notion.
Activists turned to the idea of a breakaway after mass rallies in 2014 calling for fully free leadership elections -- known as the Umbrella Movement -- failed to win concessions from Beijing.
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