According to the notice, large hospitals across the country can now apply to provincial health administrations, and the list of authorized hospitals will probably be publicized around July, said a notice from the ministry on Tuesday.
Living organ transplants are prohibited, it said.
Worldwide, living organ donation is a last resort as it inevitably leads to donor complications, experts said.
Meanwhile, it can also lead to illegal human organ trafficking.
In a court case in May 2010, an illegal agency had part of the liver of an unemployed man cut out for 40,000 yuan (US$6,150).
Estimates hold that 1.5 million Chinese need transplants each year but only 10,000 of them can obtain a suitable organ.
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