Building a new municipal subsidiary administrative center in Tongzhou, about 40 minutes drive from the city center, will draw approximately 400,000 urban residents from city center to the suburban district in the future, the Beijing Municipal Commission of Urban Planning said.
The move will help the capital ease urban problems, such as slowing the city's population growth and moving out some of Beijing's non-capital functions, state-run Xinhua news agency reported.
To accommodate Tongzhou district's new residents, the capital will improve public services such as medical care and education in the suburban district.
Beijing will also upgrade roads between urban centres and Tongzhou to increase traffic flow, he said.
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In addition to the city's administrative shift, the move is also expected to drive other functions such as tourist and commercial properties to move to the new administrative center.
The Chinese capital has sought to address its severe "urban diseases," such as traffic congestion and air pollution, by curbing its population growth and moving facilities to nearby regions.
Beijing's total population stood at 21.5 million in 2014, according to official data. Beijing has over 5 million registered vehicles on its roads, so traffic congestion is widespread. It is predicted by 2016, Beijing will have over 6 million cars on its roads.