The Type 056 stealth frigate has a sleek design that helps it evade radar detection, and needs just one-third of the crew used by its predecessor.
The first ship was delivered to the Chinese navy in Shanghai on Monday, state-run news agency Xinhua said.
China said the new vessel is part of a systematic upgrading of naval hardware.
The frigate -  one of 20 being built - will mainly be deployed on escort missions and for anti-submarine operations.
Xinhua said it would enhance the country's ability to safeguard national security and defend maritime sovereignty.
The arrival of the new vessel comes at a time when China is in dispute with a number of neighbouring countries over national boundaries in the East and South China Seas.
Mostly recently Beijing has been arguing with Tokyo over the Senkaku Islands - known as the Diaoyu Islands in Chinese - which are controlled by Japan but also claimed by China.
Beijing is in the middle of a programme to improve its navy, launching its first aircraft carrier, Liaoning, two years ago, the BBC's Michael Bristow reports.
Chinese President Hu Jintao said last year that the country needed to transform itself into a "maritime power".
China's navy has taken delivery of the first of a new kind of stealth frigate, as tension continues with neighbouring countries over maritime borders.