The governor in a letter made public on Monday reversed a January decision by the state parole board, saying the murders were "especially heinous."
"I believe his release would pose an unreasonable risk of danger to society at this time," he wrote.
The board determined that Davis, 67, is ready to be released. While incarcerated, he earned a master's degree in religion and a doctorate in philosophy of religion, married and fathered a daughter.
Davis was convicted of helping kill musician Gary Hinman in his home and former stuntman Donald "Shorty" Shea, who lived in Manson's commune.
Schwarzenegger acknowledged that Davis had made "some credible gains" during his incarceration. But in turning down the parole recommendation, he cited the "especially heinous" nature of the slayings and Davis' repeated efforts to minimize his involvement.
The Republican governor also questioned whether Davis is still too willing to follow others' direction, noting his association with the American Nazi Party after he went to prison in 1972. He also found troubling Davis' statements that he would be subservient to his wife should he be released.
"Davis still exhibits conformist tendencies," Schwarzenegger said in a decision he signed on June 22. The decision was sent to Davis and the parole board on Friday.
Davis' attorney, Michael Beckman of Santa Monica, said he will file a lawsuit in to reverse the governor's decision. He said Schwarzenegger had no valid grounds to reverse recommendations by the parole board's chairman and a board-appointed psychiatrist.
"He doesn't pose a public danger," Beckman said of his client. "It's a political calculation rather than an individual consideration."