"We're excited about the significant business we have in China and its growth potential over the next number of years".
Beijing Sinnet Technology said it would buy Amazon's Chinese web services business for up to $301 million, effectively killing off the USA firm's cloud-computing business in the country.
According to the company, it is selling hardware to comply with laws that forbid ownership or operation of certain types of cloud technology.
Chinese regulators are tightening rules on foreign data and cloud services, implementing new surveillance measures and increasing scrutiny of cross-border data transfers.More news: Student sit-in planned at Canadore College
A Cyber Security Law (CSL) came into effect back in June, requiring certain companies to hold data within China and to undergo on-site security laws.
AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest.
Due to increased regulations surrounding online data in China, Amazon has announced that it will sell off the hardware now powering its public cloud business in the country. Due to compliance issues, Amazon began operating AWS services in 2016 through its partner Sinnet.
Amazon Web Services (AWS) is selling some of its physical infrastructure in China to a local partner in order to comply with local laws, it has emerged. Microsoft operates its Azure cloud services unit in partnership with China-based 21Vianet Group.More news: French skier dies during training in Canada
Other legislation sees it work with Sinnet but also ChinaNetCenter, which provide the internet data centre and ISP services to deliver AWS's cloud.
Microsoft, Oracle and IBM did not immediately respond to request for comment on Tuesday. Amazon's Chinese equivalent, Alibaba, leads the way having launched its own public cloud service in 2009 before expanding globally.
Amazon was a late entrant to the Chinese cloud market which is dominated by local players like AliCloud and China Telecom.More news: Chelsea fans react to what Tiemoue Bakayoko has said about N'Golo Kante
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