China Racing signed their official agreement with the International Automobile Federation (FIA) on Wednesday in Paris.
"I believe Formula E is a perfect platform for China Racing and our key partners to get involved in the future of motorsport," said Team China chairman Yu Liu.
"We also believe this is a good platform for Chinese and global electric vehicles companies to do our part to help create a sustainable planet," he added.
Formula E chief executive Alejandro Agag, a former chairman of Premier League soccer club Queens Park Rangers, said he hoped added Chinese involvement would make cities healthier places to live.
"China has enormous potential for the expansion of electric vehicles as a tool to fight pollution in cities," said the Spanish businessman.
"We think the FIA Formula E championship can be a powerful tool to make electric cars popular with the Chinese public."
Formula E will be an FIA-sanctioned championship involving 10 teams and 20 drivers.
The organisers aim to hold races in at least 10 cities around the world, including Rome and Rio de Janeiro which have already been announced. They hope to add London to their list.
The world champion will earn two million euros ($2.61 million) and the constructors champion four million euros at the end of the first season.
($1 = 0.7649 euros)