In a speech outlining the Government's plans on leaving the EU at Lancaster House in London, the Prime Minister said both Houses of Parliament will vote on the final deal.
Mrs May said the plans "cannot mean membership of the single market".
She said: "Being out of the EU but a member of the single market would mean complying with the EU's rules and regulations that implement those freedoms, without having a vote on what those rules and regulations are.
"It would mean accepting a role for the European Court of Justice that would see it still having direct legal authority in our country.
"It would to all intents and purposes mean not leaving the EU at all."
The PM confirmed that the Government will put the final deal between the UK and the EU "to a vote in both Houses of Parliament before it comes into force".
But she did not make it clear whether a vote against the agreement would result in the UK remaining within the EU, or leaving the block without any kind of deal.
Here are the key points from her speech:
Remaining within the single market would require the free movement of people and accepting the jurisdiction of the European Court of Justice.
Instead, Mrs May said she would seek "the greatest possible access to the single market on a reciprocal basis, through a comprehensive trade agreement".
That would mean the "days of Britain making vast contributions to the European Union every year will end", although there could be some specific European programmes that the UK might want to contribute in.
She said she wanted the UK to remain part of a customs agreement with the remaining 27 EU states, but said she had an "open mind" over whether this would be through associate membership of the Customs Union or through another arrangement.
And she said the UK would regain control of its borders, would no longer be under the jurisdiction of the European Court of Justice and would work to maintain a common travel area with the Republic of Ireland as well as strengthening the "precious union between the four nations of the United Kingdom".
But she sounded a warning to the EU against trying to "punish" the UK, claiming a punitive Brexit deal would be "an act of calamitous self-harm" and adding "no deal for Britain is better than a bad deal for Britain".
She also said if Britain was excluded from access to the single market, it would be free to change the basis of its economic model to pursue alternative arrangements.
At the weekend, Chancellor Philip Hammond said the UK would have to change its economic model to "regain competitiveness" if Britain was denied access to the single market.
In an interview with German newspaper Welt am Sonntag, he said a move away from a European-style system would be needed, hinting at cuts to corporation tax and a possible "tax haven" model.
The confirmation of a parliamentary vote on the deal meets a key demand of MPs who have raised concerns about the impact of leaving the EU on the UK.
Under Article 50 of the EU treaties, Britain will have two years to negotiate a deal after it informs the European Council of its intention to quit - which Mrs May has pledged to do by the end of March this year.
The pound surged in value against the dollar as the PM delivered her Brexit recipe - with Sterling later trading above $1.23 - more than 2.4% up - as investors reacted to the speech.
It also made up some ground against the euro as the remarks contained little the market had not already largely priced in.
Source: Wil Longbottom - Sky News