The People's Liberation Army personnel are to "set up a support base in Djibouti", according to the report.
Chinese Foreign Ministry spokesperson Geng Shuang said the base will be "used for the better fulfilment of the national obligation of China and for the escort mission and humanitarian aid".
It continued saying the base was a decision made by both countries after 'friendly negotiations and accords with the common interest of the people from both sides'.
China's deal with Djibouti ensures its military presence in the country up until 2026, with a contingent of up to 10,000 soldiers, according to worldwide current affairs magazine The Diplomat.
The base will support China's military operations in Africa and Asia as part of worldwide humanitarian missions, escorting ships to avoid piracy and peacekeeping, the Army said.
China has expanded its military ties across Africa in recent years.
Wikipedia NASAChina's Base in Africa Means More Than an'Attribute of a Global Power
It added that China will under no circumstances be seeking military expansionism or become involve in arms races. Djibouti, which is about the span of Wales, is situated at the southern access to the Red Sea on the course to the Suez Canal.
The Global Times, a newspaper which often takes a nationalist tone, said the new facility was indeed a military base.
For now, Djibouti will provide a more comprehensive resupply point for the constant stream of warships traveling back and forth from China.
China joins the US, France and Japan, among others, with permanent bases in Djibouti, a former French colony with a population of less than one million residents.
Touted by military experts as one of the most strategically important U.S. military bases overseas, Camp Lemonnier has been dramatically expanded since it was built in 2001. It makes sense there is attention on this from foreign public opinion, " said the paper, which is published by the official People's Daily. It is a small barren nation sandwiched between Ethiopia, Eritrea and Somalia.
In any case, China's military advancement was tied in with ensuring its own particular security, it said.
There has been determined theory in strategic circles that China would manufacture other such bases, in Pakistan for instance, yet the administration has expelled this.