The move comes after a visit to China - seen as a key market for business and tourism - last week by Transport Secretary Patrick McLoughlin. The current agreement, signed in 2004, limits UK and Chinese airlines to 31 return services per week between six destinations.
The new deal will look to increase both the number of flights and the destinations.
Mr McLoughlin said the change would be good for both countries. He said: "The world of today is very different to that of a decade ago and we need a new agreement that reflects that."