The Chancellor made the potentially controversial announcement as he wound up his visit to the far eastern economic giant.
Firms' investment in the UK will be underpinned by a memorandum signed in Beijing earlier this week.
The first deal could be struck as early as next week with the go-ahead for a new £14 billion plant at the Hinckley C site.
Initially Chinese companies are likely to hold a minority stake in any project, but this could rise over time to a majority.
Speaking at Taishan nuclear power station in southern China, Mr Osborne said: "Today is another demonstration of the next big step in the relationship between Britain and China - the world's oldest civil nuclear power and the world's fastest growing civil nuclear power.
"It is an important potential part of the Government's plan for developing the next generation of nuclear power in Britain. It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers."
The Treasury said the memorandum would ensure that British companies such as Rolls-Royce can benefit from China's multibillion-pound civil nuclear programme.
The UK-based International Nuclear Service will also be sharing expertise in radioactive waste management, including starting to train Chinese technicians later this month.
EDF has been negotiating with three Chinese nuclear giants on the Hinkley C project - CGN, CNNC and SNPTC - all of which have been seen by the Chancellor this week.
Hinkley C in Somerset is due to be the UK's first new nuclear power station since 1995.
French energy giant EDF is the main company behind the project, but has been looking for partners to share the costs.
Energy Secretary Ed Davey said: "This is an exciting development, strengthening our relationship with China in a way that will benefit both countries. Investment from Chinese companies in the UK electricity market is welcome, providing they can meet our stringent regulatory and safety requirements."
Deputy Prime Minister Nick Clegg defended the policy, insisting concerns about human rights in China should have no bearing on such decisions.
He told a caller to his weekly LBC 97.3 radio phone-in: "You're just flatly wrong in that somehow the issue of human rights in China ... has anything to do with how we as a country, UK plc, our country determined by British politicians, on behalf of British voters, make sure that we keep the lights on and that we produce energy on a sustainable basis in the future."
He went on: "If people want to come here and build safe, sustainable, low carbon ways of generating energy, without dollops of British taxpayers' subsidy, in a way which is entirely regulated by us, where the rules are set by us - not in Beijing but by us - then I think that's of course something we should be open to."
The UK had to be "hard-headed, open, grown-up, but totally frank about our differences, particularly on human rights" with China, he said.
"It doesn't serve our national long-term interests to somehow brush human rights under the carpet."
Friends of the Earth director of policy and campaigns Craig Bennett said the nuclear agreement was "a bad deal for taxpayers".
"The Government has chosen to give enormous long-term handouts to Chinese and French companies when they could be developing a world-class renewable industry in the UK," said Mr Bennett.
"The reality is that nuclear power takes decades to build, but climate change and energy challenges are upon us now - this focus on nuclear distracts from more urgent priorities such as delivering energy efficiency to households who are suffering rocketing energy bills due to the rising price of gas.
"The Government must listen to investors who are calling for a 2030 electricity decarbonisation target in the Energy Bill and focus on the measures to deliver it."