China’s Central Bank is to cut its bank reserve requirement ratio by one percentage point.
The bank said in a statement that the new reserve requirement would take effect from Monday.
The aim is to stimulate more lending into the nation’s slowing economy.
The move allows banks to lend out more money, with Chinese state media saying the cut will release 1.2 trillion yuan ($194bn; £130bn) into the world’s second-largest economy.
China’s economy grew by 7% in the first quarter of the year, a large figure by Western standards, but the lowest for the country since the financial crisis of 2009.
Last year its growth slowed to its weakest in 24 years, expanding 7.4% in 2014 from 7.7% in 2013.
It meant growth in the nation’s economy missed its official annual growth target of 7.5% for the first time in 15 years.
As part of the new measures the Central Bank has also said it will provide various further cuts to reserve requirements for banks providing agricultural financing.
The bank had previously cut its reserve requirement two months ago.