The People's Liberation Army announced the move in November, meaning non-core activities such as military-run hospitals and hotels open to the public will be ditched.
The military was banned from overt commercial activities in 1998, but allowed some exceptions.
According to a circular issued by the Central Military Commission, headed by President Xi Jinping, the armed forces must not sign any new contracts for paid services and allow existing contracts to expire.
The notice was carried on the front page of the People's Liberation Army Daily.
Ending all paid services is "an important political task" and all members of the military must fully implement the
decision, the notice said.
Services that fulfil an important social security function will be allowed to be included under a new "civil-military
integration" scheme, it added, a programme the government has given few details about.
The official Xinhua news agency said the change had been introduced "to reduce corruption in the army".
The military is reeling from an anti-corruption campaign Xi launched three years ago, which has seen dozens of officers investigated, including two former vice chairmen of the Central Military Commission, Guo Boxiong and Xu Caihou.
Chinese People's Liberation Army (PLA) military delegates at the Great Hall of the People in Beijing. Source: AAP
Xu died of cancer last year before he went on trial. Guo has yet to face a court.
Gong Fangbin, a professor at the PLA's National Defence University, told the state-run Global Times newspaper the end of paid-for services would help with the military's modernisation.
"Paid services can sometimes encourage corruption and the military should focus on national defence," Gong said. "The announcement also aims to improve the military's combat capability."
The People's Liberation Army Daily said in editorial the military's real focus should be on how to win wars, and seeking profits would only distract them.
"The military's basic function is to fight, and deviating from that core activity will bring endless disaster," it said.
Xi's push to reform the military coincides with China becoming more assertive in its territorial disputes in the East
and South China Seas. Its navy is investing in submarines and aircraft carriers and its air force is developing stealth fighters.
The armed forces are also losing 300,000 members, following a surprise announcement by Xi in September.
The reforms have proven controversial, and the military's newspaper has published commentaries warning of opposition to the changes and concern about jobs.
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