This sentence uses the Past Simple negative ('didn't finish') with the word 'yet'. 'Yet' is commonly used with the Present Perfect tense to indicate that something has not happened up to the present moment.
Corrected Sentence: He hasn't finished his project yet.
Explanation: The Present Perfect tense is used with 'yet' to talk about something that was expected to happen but has not happened up to now. 'Hasn't finished' is the Present Perfect negative form.