The move aims to "regulate and standardize" the "fledgling and troublesome" cafe business, said the report.
The government is concerned about the sudden popularity of such cafes, which are gathering places for online gamers and those seeking Web information outside of official sources, in a country where many still cannot afford PCs or Internet access.
"The spread of illegal content among Internet cafes and their poor operating conditions have been a major problem in China's Internet industry," according to an earlier Xinhua report.
A fire set by an arsonist in June last year killed 25 in an unlicensed Internet cafe. The resulting crackdown on unlicensed premises has halved the number of outlets in the country. Since then, the China government has also stopped issuing new licenses.
Ministry of Culture official Liu Yuzhu made the announcement to consolidate control of the cafes last week. Under the scheme, nearly all cafes will be placed under the management of about 100 larger companies.
Companies said to be getting into the business are mainly state-owned, and include telecom providers such as China Unicom, Great Wall Broadband Network and China Netcom.
CNETAsia staff reported from Singapore.