The move raises pressure on Senate Democrats to win the votes of Sen. Maria Cantwell (D-Wash.) and a handful of Senate Republicans.
Senate Democrats aim to pass the Wall Street overhaul bill this week, but the passing of Sen. Robert Byrd (D-W.Va.) has given them little room to negotiate votes. House and Senate lawmakers finalized the legislation in a conference process early Friday morning.
"As I have indicated for some time now, my test for the financial regulatory reform bill is whether it will prevent another crisis," Feingold said in a statement. "The conference committee's proposal fails that test and for that reason I will not vote to advance it."
Feingold and Cantwell voted against ending debate on the bill in May and against the overall bill. Democrats were able to advance the legislation with the help of Republican Sens. Scott Brown (Mass.), Olympia Snowe (Maine) and Susan Collins (Maine).
Brown has expressed disappointment at the final bill that passed through the conference committee. If he votes against the legislation in the Senate, Democrats will need to hold the rest of the votes they had in May and swing either Cantwell or another Republican to advance the bill.
Collins is reviewing the legislation, according to her office, and has not firmly committed to back the bill.
Sen. Chuck Grassley (R-Iowa) voted for the underlying legislation in May, but voted against cutting off debate.