The trial sponsored by the US reproductive health organisation CONRAD, was stopped after the group of women using the gel were being infected with HIV at a higher rate than the others.
The World Health Organisation said the drug, which uses a microbicidal gel, did not help the women but made them more vulnerable.
The tests were carried out on more than 2 000 women in South Africa, Benin, Uganda, Zimbabwe and India.
There are fears that some women, who were taking part in the clinical trials which started in 2005, might have contracted HIV.
Scientists had hoped that microbicides could have an impact in the fight against AIDS, especially in Africa, where women bear the brunt of the disease as many cannot negotiate for safer sex.