The deal reached between Dalian Wanda and the Chinese Football Association (CFA) would include the hiring of world-class foreign coaches and sending young players to Europe for training, the China Daily and Xinhua news agency said.
"The progress of Chinese football depends on the emergence of high-level young players," the China Daily quoted Wei Di, who took over as head of the CFA last year, as saying.
"China's negligence in developing teenage football directly lead to the slump in the sport in recent years."
While 500 million yuan was a good start it was still "not enough", he added.
Dalian Wanda Chairman Wang Jianlin said the deal would be extended if the cooperation proved effective over the next three years, otherwise they might pull out.
"I hope our cooperation will reawaken people's passion for football," the China Daily quoted him as saying.
Dalian Wanda is not new to the football scene.
In 1993 it established a professional team, called Dalian Wanda Football Club, but the company sold up in 2000 out of disappointment at the development of Chinese football.
Chinese football has lurched from crisis to crisis in recent years and disaffected fans have turned away from the game amid corruption scandals, match-fixing and violence on and off the pitch.
In 2009, Vice President Xi Jinping said during a visit to Germany that he liked soccer very much and hoped the game could develop better in China, prompting renewed government interest in the game.
"Over the last two years, national leaders have paid a great deal of attention to the development of football in China, and measures to reshape the game have achieved visible results," Dalian Wanda's Wang was cited as saying by Xinhua.
