He had announced their birth in November, after which the authorities announced an investigation into the matter.
A team of investigators told the official Xinhua news agency on Monday that a preliminary investigation had concluded that He had "organised a project team that included foreign staff, which intentionally avoided surveillance and used technology of uncertain safety and effectiveness to perform human embryo gene-editing activity with the purpose of reproduction, which is officially banned in the country".
Between March 2017 and November 2018, He forged ethical review papers and recruited eight couples to participate in his experiment, resulting in two pregnancies.
One of the mothers gave birth to twins nicknamed "Lulu" and "Nana", the investigators said. Another woman is still carrying a gene-edited foetus.
They also said that He, his staff and organisations related to his project would be punished according to laws and regulations.
The Guangdong government will keep the twins under medical observation.
The government decision was welcomed by the scientific community.
In an interview with Beijing Youth Daily on Sunday, Shao Feng, from the Chinese Academy of Sciences and deputy director of the National Institute of Biological Sciences, said the whole incident would need to be investigated thoroughly.
"If I were to handle the matter, I would never tell [the twins] they've been gene-edited and allow them to live their lives like normal people," he said. "I think that's for the best."
An expert in the field, Shao is worried about potential health risks the children will face as well as the incident's effect on the human race.
"Once the gate of gene-editing is wide open, the human race will be finished," he said. "The technology is strong but the terrifying fact is that anyone slightly trained in a lab can perform it."
He has not been seen in public since he announced the births at the Second International Summit on Human Genome Editing in Hong Kong in November. Some media reports have claimed he is being kept under house arrest or even detained by police.
A spokeswoman at the Shenzhen-based Southern University of Science and Technology, He's employer, has previously dismissed talk of detention as rumours.
He has faced a wave of condemnation from China's scientific community and health officials have insisted they knew nothing of his experiments.
China's Ministry of Science and Technology has ordered research institutes to suspend all of He's scientific projects.
An investigation into He's work found that the ethics review committee at the Harmonicare Women and Children's Hospital, which the scientist said had approved his research, was not registered with the city's health authorities.
The hospital had earlier denied any involvement with the project.
Last month the Shenzhen authorities announced they would issue draft guidelines for the ethical review of biomedical research involving humans.
Internet users flooded social media with comments on the news of investigations into He's work. "This professor is not worthy of being in education, he has the evil ambitions of a terrorist in disaster movies," one wrote on Weibo.
"I knew he'd end up in ruins, and this will affect the Chinese scientific community," another wrote.
It is unclear what punishments He faces or what the consequences would be for the babies and the pregnant volunteers, if any.
This article was first published in South China Morning Post.