A meeting of the Council of Ministers took a formal decision on Monday evening regarding the trip, Information Minister Sherdhan Rai said.
This is going to be Oli's second foreign trip after he became the prime minister on October 11, a news agency reported.
He visited India from February 19 to 24.
Officials at the Nepal's ministry of foreign affairs said preparations for Oli's visit to China were on but dates were yet to be finalised.
"The prime minister will attend the 2016 Annual Conference of the Boao Forum of Asia to be held in China from March 22 to 25," said Oli's Foreign Relations expert Gopal Khanal.
"But it is confirmed that the prime minister will make an official trip to China," he added.