The deal means the number of passenger flights for each country will increase from the current maximum of 40 per week to up to 100. Furthermore, cargo-only services will be unlimited.
The restriction on the number of destinations that airlines can serve will also be lifted, meaning airlines will no longer be restrained to six destinations each.
Transport secretary Chris Grayling said: “This deal is a big moment for the UK. Strong connections with emerging markets like China are vital for us if we are to continue competing on the global economic stage.
“Hundreds of thousands of Chinese people visit the UK every year, spending hundreds of millions of pounds.
“Raising the number of permitted flights between the 2 countries will provide massive opportunities for our businesses, helping increase trade, create jobs and boost our economy up and down the country.
“I am delighted that talks between the UK and China have concluded successfully as a result of which flight limits will be increased, thereby enabling airlines to operate more services between the two countries.
“These new arrangements will further strengthen British - Sino relations. Post Brexit, improving trade links with key markets such as China will boost exports and tourism, as well as helping create jobs and strengthening our local economies. This deal demonstrates that the UK is very much open for business.”
The news comes as visits from China increase with visits in 2015 up 46% on 2014 to almost 270,000.
Spend increased by 18% to £586 million during the same period, moving China into the UK’s top 10 most valuable inbound markets.
Earlier this year Manchester airport launched the first direct route between the UK and China from an airport outside of London, bringing an estimated £250 million in economic benefits to the UK over the next decade.