Ireland's Ryan O'Shaughnessy progressed from the first semi-final with his performance of Together, a song about the ups and downs of a relationship.
China's broadcasting authority banned depictions of same-sex relationships on television in 2016, and more recently blocked programs from booking guests with tattoos as part of a broader crackdown on "vulgarity".
The EBU has announced this evening that they have terminated their contract with Chinese broadcaster Mango TV after they censored Ireland's performance.
"This is not in line with the EBU's values of universality and inclusivity and our proud tradition of celebrating diversity through music", the EBU said in a statement online.
The singer's exuberant performance of inclusive anthem We Got Love at the second semi-final in Portugal clearly went down well as Australia now gets a fourth chance at Eurovision glory in the final on Saturday.
Albania's entry, performed by Eugent Bushpepa, was the other act censored by mango TV. A rainbow flag waved in the crowd was also censored. Sina Weibo later retracted the ban after an unusually loud, and effective, outcry from supporters of LGBT rights in China.
"From the very start we've said love is love - doesn't matter whether it's between two guys, two girls or a guy and a girl, so I think this is a really important decision by the EBU", he said.
LGBT news accounts on the social media site have since reported the EBU's announcement, attracting a flurry of comments from users.
Host of the Portuguese show Filomena Cautela made a beeline for Mauboy backstage at half-time, and joked about the time difference with Australia - the semi-final took place in Portugal on Thursday night and was broadcast live in Australia on Friday morning. "Mango TV will be warned by the State Administration if they don't remove that song".
- Elina Svitolina loses to Suarez Navarro, Simona Halep advances — Madrid Open
- Fox Cancels Last Man on Earth, Brooklyn Nine-Nine and The Mick
- Ford Halts Production of F-Series Pickup Due to Parts Shortage
- Nokia 7 plus, Nokia Sirocco go on sale in India from today
- Can Manchester United win the Premier League this season?
- N++ bringing acrobatic ninja platforming to Switch later this month
- Zinedine Zidane makes Cristiano Ronaldo and Mohamed Salah claim
- SpaceX Launch Time & Live Stream for Falcon 9 Block 5
- Junket tourism
- Google Assistant will soon be able to make appointments on your behalf