Nortel will expand the telecommunications operator's existing GSM (Global System for Mobile Communication) 900/1800 networks.
The network expansion will take place in Zhejiang, Hunan, Shanxi, Ningxia, Henan, Xinjiang and Shandong provinces as well as Chongqing municipality.
Nortel added that it would be providing China Unicom with solutions such as GSM switching, radio base stations and transmission equipment.
When contacted Thursday, a Nortel representative said the expansion of the networks was expected to be completed by the end of this year.
In addition, the expansion will raise China Unicom's GSM subscribers served by Nortel Networks infrastructure from about 7.1 million to about 11.6 million, the latter claimed.
The representative said Nortel had previously signed contracts valued at $275 million with China Unicom to supply Code Division Multiple Access (CDMA) equipment to its national digital cellular network.
Anand Menon reported from Singapore.