The index giant said in a release it had added 11 companies and deleted nine from its MSCI China A inclusion index, bringing the total number of index constituents to 234 following its May index review.
Among the China A shares, referring to stocks traded on the mainland, to be included are Industrial and Commercial Bank of China and China Construction Bank, China's first and second largest banks, respectively. Oil major PetroChina, China's biggest oil producer, is also part of the list.
The 234 stocks will represent an aggregate weight of 0.39 percent in the MSCI Emerging Markets Index when they are included, according to the index giant. The second phase of the inclusion will occur in September.
"The inclusion of A-shares in the MSCI indices is likely to increase the participation of foreign institutional investors. In the medium to long term, this will help the A-share market to become more sophisticated, improve liquidity and see it increasingly driven by fundamentals rather than short-term market noise," Raymond Ma, portfolio manager at Fidelity International, said in a statement.
Ma added that he will be "most constructive" on the consumer, information technology and industrials sectors following the MSCI inclusion.
The inclusion is seen as relatively small, given its 5 percent inclusion factor when completed, but some analysts are upbeat about its impact on long-term inflows.
Although the inclusion is a "mere drop in the ocean compared to the actual size of the China domestic market, it will still mark China's grand entrance into global investment benchmarks," said Howard Wang, head of greater China equities at J.P. Morgan Asset Management.
J.P. Morgan expects some $6.6 billion in passive inflows to likely migrate to MSCI China companies in the near term.
Active flows could be as much as five times larger than passive flows, amounting up to $40 billion of flows into Chinese securities, creating a powerful tailwind, according to J.P. Morgan.
MSCI had first announced in June last year that it would be adding mainland Chinese shares to its benchmark emerging markets index after rejecting them for three years.
The MSCI Emerging Markets Index is tracked by more than $1.9 trillion in assets, as of the end of 2017.
Stock indexes on the mainland have come under pressure this year, with the benchmark down more than 4 percent so far. The blue-chip CSI 300 index, meanwhile, has fallen around 3 percent.
— CNBC's Evelyn Cheng contributed to this report.
Clarification: This story has been updated to more accurately reflect the types of shares that are expected to see passive inflows.