Liang Yaohui, a deputy to the National People's Congress (NPC), was expected to be removed from his post as the Provincial Council of Guangdong recommended action against him for "serious violation of laws".
Prostitution is illegal in China and is under tight suppression by authorities. However, it has been a booming industry in many cities, state-run Xinhua news agency said.
Liang is an owner of a five-star hotel in south China's Dongguan City, which was involved in sex trade during a previous national crackdown on prostitution, Xinhua reported.