The "Peace Mission-2014" exercise will be held between August 24-29 at Zhurihe training base in Inner Mongolia Autonomous Region, in accordance with the 2014-2015 defense ministry cooperation plan among the SCO members.
Chinese Defence Spokesman Col Geng Yansheng said at a regular news briefing that preparations for the drill were almost complete.
Kazakhstan, China, Kyrgyzstan, Russia and Tajikistan will send armed forces by land and air in early August, Geng said.
It does not target any other party, the ministry said.
Founded in Shanghai in 2001, the SCO member states include China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.
Afghanistan, India, Iran, Mongolia and Pakistan have observer status while Belarus, Turkey and Sri Lanka are dialogue partner in the organisation.