C&M Information Technologies will act as the "exclusive licensor" of Windows 10 and is working on a modified version of Windows 10 for the Chinese government. It will also provide support to the government customers.
The move comes as Microsoft looks to improve its image in the world's second-largest economy. U.S. companies in China received a bad reputation after National Security Agency (NSA) contractor Edward Snowden alleged that foreign products were being used for spying. And last year, China's antitrust regulator conducted new raids on Microsoft's offices in China.
"We'll continue to keep Windows 10 secure and sustain our strong privacy standards, while recognizing that public sector solutions may differ from technology offered to private sector enterprises and consumers around the world," Yusuf Mehdi, corporate vice president of the Windows and Devices Group at Microsoft said in a blog post.
Microsoft has also been making a broader push into the consumer sector in China in order to get legitimate versions of Windows to users in a market that is dominated by piracy. In September, it announced a partnership with China's largest search engine Baidu to allow the service's customers to upgrade to Windows 10. It signed similar deals earlier this year with Lenovo, Tencent and Qihu 360.