The system, codenamed "COMPASS", will be crucial for the transport and oil exploration industries as well as for weather and disaster forecasting, telecommunications and public security, the news agency said.
The satellite was launched at 5.30 a.m. from the Long March 3I carrier rocket. This satellite will join other four satellites in orbit to form a network that will eventually consist of 35 satellites.
China started building its own satellite navigation system in 2000 to end its dependence on the US GPS system, when it sent two orbiters as a double-satellite experimental positioning system.
The system is expected to start providing navigation, time and short message services in the Asia and Pacific region before 2012 and will be capable of providing global navigation services by 2020.