The decision came after China had imposed a three-year ban on ivory imports in March this year, in an escalated fight against illegal trading of wild animals and plants.
"China will gradually stop the processing and sales of ivories for commercial purposes by the end of 2017," the official Xinhua news agency said, citing a government statement.
The move will impact China's 34 processing enterprises and 143 designated trading venues, with dozens to be closed by the end of March 2017, state-run Xinhua news agency quoted an official statement as saying.
China's move, if implemented, strictly could a "game changer", specially the African elephant conservation as hundreds killed every year by poachers to feed into the burgeoning markets in China and Hong Kong.
As a result the numbers of Africa's savannah elephants dropped to 3.5 lakh thousand in 2014.
China's move to ban ivory trade followed a resolution at the Convention on International Trade in Endangered Species (Cites) in South Africa in October.
China has the biggest ivory market in the world - some estimates suggest 70 per cent of the world's trade ends up there. Ivory's price can reach USD 1,100 per kg in China.
Elly Pepper, deputy director of wildlife trade for the Natural Resources Defence Council, praised China for its "great leadership" on the issue.
"Setting such an aggressive timeline to close - once and for all - the largest domestic ivory market in the world is globally significant, Pepper said.
"It's a game changer and could be the pivotal turning point that brings elephants back from the brink of extinction," she said.
A surge in the killing of elephants over the past seven years has seen populations across Africa shrink by a third, according to the recently published Great Elephant Census.
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