The bill's author, Susan Bonilla, said a lack of research into fertility was affecting thousands of women in California who face the decision of having to store their eggs for fertility reasons.
'Women should be very troubled that Governor Brown doesn't think they should be able to have a choice when it comes to their own eggs', she said.
'There's a deeper level in his veto statement that questions the ability of a woman to engage in informed consent and assess the risks for herself of this procedure', she added. 'It's regressive to woman's health, medical breakthroughs and the fertility issues that are so very important for a woman'.
California is one of three US states that does not allow women to sell their eggs for research - although they are allowed to sell to fertility clinics and can receive up to $10,000 per donation. Men are currently allowed to sell their sperm for research. The bill would have allowed egg donors to be 'compensated for their time, discomfort, and inconvenience in the same manner as other research subjects'.
However, Governor Jerry Brown said that 'in medical procedures of this kind, genuinely informed consent is difficult because the long-term risks are not adequately known'.
Professor Mark Sauer, chief of reproductive endocrinology at Columbia University Medical Center, New York, said that the risk to the donor was an 'acceptable risk'. '[Egg retrieval] is a 35-year-old medical procedure, and the safety track record is well-defined', he said.
Governor Brown said 'the questions raised here are not simple, they touch matters that are both personal and philosophical'.
'Not everything in life is for sale and nor should it be', he wrote in his veto message to the California State Assembly.
The ban on women selling their eggs for research was introduced in 2006 following a 2004 $3 billion stem cell initiative that created the California Institute for Regenerative Medicine (CIRM), which provides grants to scientists working in stem cell research and regenerative medicine.
Bonilla's bill, AB 926, would have only permitted women to donate their eggs to research into infertility and contraception, however. Donating eggs for research funded by CIRM would have remained unlawful, explains the Huffington Post, Los Angeles.
The bill was passed by the California Senate in July and the Assembly in August. Bonilla said she may reintroduce the bill next year.