The law takes effect May 15, the official China Daily reported Thursday.
Under the law, dog owners must also give their pets' puppies to eligible no-dog households or to government-approved adoption agencies before the pups reach three months, the report said.
Anyone currently owning two or more licensed dogs will be allowed to keep them, it added
Dog ownership has grown alongside China's fast-expanding middle class with official estimates putting Shanghai's pet dog population at 800,000 -- although only a quarter of that number are registered, a previous report said.
The government had said tighter regulation was needed due to rampant barking, unscooped waste, and the growing risk of dog attacks, which affect the city's environment and sanitation.
There were about 58 million pet dogs in 20 major Chinese cities at the end of 2009 and the figure is rising about 30 percent each year, according to a survey by Beijing-based magazine Dog Fans.
Pet owners in China spend an estimated $2 billion a year on their animals, according to Per Lyngemark, founder of Shanghai-based Petizens.com, a Facebook-like site dedicated to pets.
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