Permanent residence permits will be adopted to replace the much-criticised temporary residence permit, according to a public security reform plan released today.
Temporary residence permits have long been held by hundreds of millions of Chinese migrant workers, who have to apply for the permit before formally living and working in a new city.
Observers said the permit has led to instability and unsettlement and that the temporary residence registry system is no longer suitable for today's situation, state-run Xinhua news agency reported.
The 'Hukou' came under bitter criticism after an incident in Guangzhou in which a migrant worker was sent to an asylum by police stating that he was beggar as he had no ID card.
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He was later beaten to death.
The tragedy triggered nationwide debate, as sending those without ID cards and residence permits to asylums against their will is unconstitutional and a violation of citizens' rights to personal liberty.
Permanent residence permit holders will enjoy many of the same privileges as local residents.
In many Chinese cities, only locals or migrants with more than five years of paying local taxes in the city are allowed to buy apartments and cars.
According to the reform plan, the level of public services enjoyed by residents will depend on their duration of residence, the report said.