The $150 billion increase is the smallest in more than a decade, as growth slows in the world's second biggest economy.
China will increase its defence budget by 7 percent this year, state media said on Monday.
State news agency Xinhua said the increase would be 1.044 trillion yuan ($151.43 billion), citing a finance ministry official.
The expenditures would be used "mainly to support the deepening of national defence and military reforms," the official said, without elaborating. Xinhua did not name the official.
The figure was released the day after the Finance Ministry did not give spending figures in a report at an annual parliamentary meeting, in what observers said was a highly unusual move and raised questions over transparency on military spending.
The budget increase is the smallest in more than a decade, as economic growth has slowed in the world's number two economy.
Last year's hike of 7.6 percent in the defence budget was the lowest in six years and the first single-digit rise since 2010, although many experts believe Beijing's actual spending on the military is higher than the official figure.
Even with an additional 7 percent this year, China's defence spending is about a quarter of what the US spends each year on defence.
In addition, US President Donald Trump has called for a 10 percent increase in the US military budget, ramping it up to $603 billion.