Starting in October, online game firms must send details of players' identities to police, the Shanghai Daily reported.
The game industry regulator - the General Administration of Press and Publication - is one of eight departments which will regulate the system, along with the ministry of industry and information technology and the ministry of public security.
Around 300 million online game players in China would be required to register their identities before playing, it said.
The latest move is designed to detect players who get round the requirement by using false identity information.
When the system is installed, teenaged players will get only half the game experience points after three hours of consecutive play and lose points if they play for five hours.
Addiction to online games - especially of young students - is a major concern for teachers and parents who say it affects their health and interferes with their studies.
On the other hand, the online game industry is important for China with annual revenue of more than 30 billion yuan (around $4.6 billion).