Amazon confirmed that it will sell a certain physical property and it still owns the intellectual property for AWS worldwide.
Commenting on its decision to sell the entire business, Amazon said, "No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS's industry leading cloud services".
Beijing Sinnet Technology Co Ltd, Amazon's China partner, said in a filing late yesterday that it would buy the United States firm's Amazon Web Services (AWS) public cloud computing unit in China for up to 2 billion yuan ($301.2 million), according to the report.
Amazon.com is selling its hardware from its China based public cloud business amidst the tightening of regulations over data online that has created a big roadblock for tech firms that operate in the second largest economy in the world.
Laws that took effect during June require companies to store their data locally.
The e-retailer added that it sold its physical assets of AWS to Sinnet in order to comply with the Chinese law.
One analyst based in Beijing said that the move by Amazon was mostly due to regulatory compliance. Amazon said on its website that its public cloud services in the country are exclusively managed by Sinnet.
AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest.
In August, Sinnet told customers it would begin shutting down VPNs and other services on its networks that allow users to circumvent China's Great Firewall, citing direct instructions from the government.
The move places a big shadow over foreign ventures of a similar nature in China.
The buyout was an attempt to "comply with our country's laws and rules and further improve the security and the service quality of the AWS cloud-computing service operated by the company", Beijing Sinnet said.
Other tech giants from the US faced hard situations in China.
In recent year, cloud services are becoming a crowded and major competitive domain in China.