China has approved a 4 trillion yuan ($US586 billion) government spending package to boost domestic demand and help the economy ride out the global credit crisis.
It amounts to almost 15% of annual economic output over two years.
The State Council also announced a shift to a "moderately easy" monetary policy.
The People's Bank of China has already made three interest rate cuts made since mid-September.
The Xinhua news agency reported on Sunday "the government must take flexible and prudent macro-economic policies to deal with the complex and changing situation."
Officials have been flagging measures to boost demand since gross domestic product growth slowed sharply to 9% in the third quarter from 10.4% in the first half. Economic conditions took a further turn for the worse in October.
Xinhua did not say how the 10-point plan would be financed, but China ran a budget surplus in the first half of the year of more than $US170 billion.
Xinhua said investments would be targeted at roads, railways and airports across China: an additional 100 billion yuan would be invested in national infrastructure this quarter.
Money would also be spent on affordable housing, rural infrastructure, the power grid, environmental protection, social welfare and technical innovation.
The cabinet also confirmed a long-awaited change in the way that value added tax is calculated.