Relatives of those who choose "green" burials will receive up to 1,000 yuan in Shenyang, capital of Liaoning Province, reports thepaper.cn.
According to a notice issued by Shenyang's Civil Affairs Bureau, four kinds of ecological, land-saving burial forms are being advocated. They include cremation disposal, burying the ashes under a tree, in a flowerbed or under a lawn without a gravestone.
The notice also contains a detailed application process, which applies to all permanent residents of the city.
The subsidy totals 1,500 yuan, with 1,000 yuan to be distributed to relatives of the dead and 500 yuan to the cemetery, an official from local Civil Affairs Bureau told thepaper.cn.
"For a plot priced above 1,500 yuan, relatives of the dead can purchase it for free; For a free plot, relatives can take the 1,000 yuan in cash," said the official.
Shenyang is also pushing for a deduction in burial expenses for its residents.
Traditional Chinese burial customs often include an elaborate funeral, which authorities consider a waste of resources and a burden on families.
Chinese authorities are calling for more ecological, low-carbon and environment friendly funerals.
A nationwide eco-burial pilot program is reportedly being carried out in some 80 cities through China's Ministry of Civil Affairs.