The Shanghai government and Walt Disney Co said they signed a cooperation agreement on Friday for a planned theme park in the city - the next step in making the long-awaited project a reality.
Disney and Shanghai authorities "have reached consensus on details of the project", the city government said in a statement.
"We have taken another step forward in the approval process," a Disney spokeswoman said in a written response to questions from AFP.
"We are still awaiting final approval from the central government on the incorporation of the related joint venture companies and the completion of the necessary regulatory processes," she said, declining to comment further.
State media reported this week that construction of the planned park in an eastern Shanghai suburb could start this month, after a six-month suspension of major construction during the World Expo ended on November 1.
The Shanghai government announced a year ago that it had received approval from authorities in Beijing for the park, which reportedly will cost 3.6 billion dollars and occupy a 10-square-kilometre (four-square-mile) area.
A dedicated agency under the city government and Shanghai Shendi Group Co Ltd, a consortium that will operate the project, were both formally launched on Friday, a Shanghai government spokesman told AFP.
The city still needs approval from the State Administration for Industry and Commerce for any joint venture with Disney, he said.
The agency is tasked with promoting leisure, retail, and sports industries in a 20-square-kilometre zone in which the Disney park will be the star attraction, the Shanghai government said in a separate statement.
Authorities said in April that the first part of the theme park, expected to open in stages starting in 2014, would span four square kilometres, with 1.16 square kilometres for the rides and the rest for other facilities.
The Shanghai Disneyland would be the US entertainment giant's third theme park in Asia, after those in Tokyo and Hong Kong.
Hong Kong Disneyland has had a bumpy ride since opening its gates in 2005, with local lawmakers saying low attendance has not justified the huge public investment.