The war drama is set in Shanghai during World War II

The rarely awarded rating means the Chinese-language war film cannot be seen by anyone under the age of 17.

It is thought the ruling by the Motion Picture Association of America (MPAA) was made because of graphic sex scenes, according to the Hollywood Reporter.

Some US cinemas refuse to show films with an NC-17 rating, thereby reducing the number of potential viewers.

However, distributor Focus Features said it would not contest the ruling.

Lee's film Brokeback Mountain won him a best director Oscar

"When we screened the final cut of this film, we knew we weren't going to change a frame," said Focus Features' James Schamus, who co-wrote the screenplay.

"As with so many of his previous films, Oscar-winning director Ang Lee has crafted a masterpiece about and for grown-ups," added Schamus, who worked with with Lee on Brokeback Mountain.

Venice premiere

The film follows a Chinese woman in Japanese-occupied Shanghai during World War II who finds herself in the centre of a plot to seduce and kill a married enemy collaborator.

It will receive its world premiere at the Venice film festival and goes on release in the US at the end of September.

It opens in the UK on 4 January.

Lee's award-winning film Brokeback Mountain received an R-rating, which means anyone under 17 can see the film but only if accompanied by an adult.