Beijing will ban smoking in most public places starting from May 1 - a big step toward tobacco control in a nation of 350 million smokers.
The move will also meet China's pledge of a smoke-free Olympics.
More than 150 Chinese cities already have limited restrictions in place, but the capital will be the first to ban smoking in all restaurants, offices and schools.
Beijing has had some smoking restrictions since 1996, when the municipal government prohibited lighting up in large public venues such as schools, sports arenas and movie theaters.
The new rules, which were announced on Saturday, expand the scope to include restaurants, bars, Internet cafes, hotels, offices, holiday resorts and all indoor areas of medical facilities.
Hotels must also have rooms for non-smokers, but the ratio is still being discussed, said Cui Xiaobo, a renowned tobacco control expert who helped draft the new rule.
Institutions that fail to comply face immediate fines of up to 5,000 yuan ($713), while it has not yet been decided how to deal with smokers breaking the new rule.
"There are proposals to fine individuals up to 200 yuan," said Cui. "They won't be fined for now, because some legislators insist the new rule contradicts a previous law."
Cui added that more details on how caterers and bar owners should enforce the ban will be released soon.
Some restaurant owners, however, doubt the rule will be implemented.
For Chinese, smoking is part of a meal, said Zhao Yingqi, manager of Jingweilou Restaurant in the city's downtown. His restaurant has about 20 non-smoking tables compared to the 400 plus tables with glass or steel ashtrays on each.
"It's not a bad idea to have non-smoking restaurants," said a 40-year-old smoker surnamed Xie who was dining at the restaurant. The majority of diners support the new rule, in line with national surveys last year.
Guo Xiaodong, boss of the first smoke-free restaurant in Beijing, said it is most important that caterers understand and abide by the rule.
Bars will also be forced to make changes. The rule requires smoking areas to be strictly segregated with clear signs.