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The animals will be housed at a reserve spanning Gansu, Shaanxi and Sichuan provinces.
About 170,000 people will be relocated to make room for the 27,134-square kilometer (10,476-square mile) preserve, according to state-run Xinhua news agency.
Pandas have long suffered habitat loss due to natural disasters, climate change and other causes. The massive reserve will keep all the animals in one place and help streamline efforts to boost the panda population. Currently, pandas in the nation live along six mountain ranges, Xinhua said.
Under the new preserve, pandas will roam freely between the habitats.
"It will be a haven for biodiversity and provide protection for the whole ecological system," Hou Rong, director of Chengdu Research Base of Giant Panda Breeding, told state media.
Reversed numbers
Giant pandas are native to China, which has struggled to reverse rapid population decline.
A nationwide census in 2014 found 1,864 giant pandas in the wild in China, up from 1,596 in 2004.
The giant panda, which is revered in Chinese culture, was once widespread throughout southern China.