China has unveiled changes to the structure of its military described by President Xi Jinping as "a major policy decision to realise the Chinese dream of a strong army", state media reported.
Beijing in November said it planned sweeping changes in a move intended to enhance the ruling Communist Party's control over the People's Liberation Army (PLA).
The changes announced late Friday will see a new army unit set up to oversee China's arsenal of strategic missiles.
Besides the "Rocket Force", the PLA also unveiled an army general command to serve as the headquarters for land forces and a support unit to assist combat troops, the official Xinhua news agency said.
The changes come as China acts more aggressively in territorial disputes in the South China Sea and East China Sea and comes just after Beijing announced on Thursday it is building its second aircraft carrier.
The nation's first aircraft carrier, the Liaoning, is a secondhand Soviet ship built more than 25 years ago that was commissioned by China in 2012 after extensive refits.
At the same time, Xi, who is chief of the Communist Party and also serves as head of the military, is planning to slash China's number of troops by 300,000 to roughly two million to craft a more efficient fighting force.
China's Central Military Commission, which Xi chairs, on Friday also released guidelines to help build the country's vision of a modern military before 2020 by cutting troops and improving the quality of combat personnel, Xinhua said.
The new PLA Rocket Force is tasked with maintaining conventional and nuclear weaponry with the ability to both deter and strike, Xi told a ceremony for the founding of the three new organisations, according to Xinhua.
But a spokesman for China's Ministry of Defence denied any shift in the country's nuclear weapons policy.
"China's nuclear policy and nuclear strategy are consistent, there has been no change whatsoever," spokesman Yang Yujun said Friday, according to a transcript posted on the ministry's website.
The new unit would take over from the Second Artillery Force, he said.
Beijing's forces have been involved in sometimes tense confrontations with Japanese and Philippine units over maritime disputes in the East China Sea and South China Sea respectively, prompting fears that the disputes could result in armed clashes.
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