China's Foreign Exchange Trade System (CFETS) said Wednesday the Asian nation would start direct trade between the renminbi and the British pound on Thursday.
Sterling and yuan would be directly swapped without using the US dollar as an intermediary, the trade platform noted.
"The move will promote the bilateral trade and investment between China and the United Kingdom and facilitate the use of renminbi and pound in the cross-border trade settlement," CFETS commented.
China has long had direct currency trade with the US and has recently added Japan's yen, the Australian, New Zealand and Canadian dollars, Russia's ruble and the Malaysian ringgit to its options.
Wednesday's announcement came during a visit to the UK by China's Prime Minister Li Keqiang and after the signing of various bilateral business contracts.
Britain for its part has been looking to make London a European hub for overseas yuan trading in competition with Frankfurt and Paris. China's central bank announced Wednesday that a subsidiary of China Construction Bank had been chosen to undertake yuan clearing business in London.
hg/uhe (AFP, dpa)