China announced on Monday that married couples may have up to three children, a major policy shift from the existing limit of two after recent data showed a dramatic decline in births in the world's most populous country.
The change was approved during a politburo meeting chaired by President Xi Jinping, the official news agency Xinhua reported.
In 2016, China scrapped its decades-old one-child policy - initially imposed to halt a population explosion - with a two-child limit, which failed to result in a sustained surge in births as the high cost of raising children in Chinese cities deterred many couples from starting families.
"To further optimize the birth policy, (China) will implement a one-married-couple-can-have-three-children policy," Xinhua said in a report on the meeting.
The policy change will come with "supportive measures, which will be conducive to improving our country's population structure, fulfilling the country's strategy of actively coping with an aging population and maintaining the advantage, endowment of human resources", Xinhua said.
It did not specify the support measures.
The announcement drew a chilly response on Chinese social media, where many people said they could not afford to have even one or two children.
"I am willing to have three children if you give me 5 million yuan ($785,650)," one user posted on Weibo Early this month, China's once-in-a-decade census showed that the population grew at its slowest rate during the last decade since the 1950s, to 1.41 billion.
Data also showed a fertility rate of just 1.3 children per woman for 2020 alone, on a par with ageing societies like Japan and Italy.
Also on Monday, China's politburo said it would phase-in delays in the country's retirement ages but did not provide any details.